Baltic Classifieds Group PLC
Annual Report and Accounts 2024
STRATEGIC REPORT
2
Strategic Highlights
4
Chair's Statement
6
CEO's Statement
7
Market Overview
10
Our Business at a Glance
•
Our business model
•
Our market position
•
Our purpose and culture
•
Our strategy
•
Why invest in us
13
Moving our Strategy Forward
16
Financial Review
20
Operational Review
21
Section 172(1) Statement
22
Sustainability Report
•
The Task Force for Climate-Related
Financial Disclosure (“TCFD”) Report
•
Non-financial and Sustainability
Information Statement
38
Risk Management
•
Principal risks and uncertainties
40
Viability Statement
GOVERNANCE REPORT
41
Corporate Governance Report
•
Letter from the Chair of the Board
Trevor Mather
•
Board of Directors
•
Senior Management
•
Corporate Governance Statement 2024
•
Board Leadership and Company
Purpose
•
Division of Responsibilities
•
Board Composition, Succession and
Evaluation
53
Nomination Committee Report
56
Audit Committee Report
60
Directors' Remuneration Report
66
Directors' Report
FINANCIAL STATEMENTS
71
Independent Auditor's Report to the
Members of Baltic Classifieds Group PLC
77
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
78
Consolidated Statement of Financial
Position
79
Consolidated Statement of Changes in
Equity
80
Consolidated Statement of Cash Flows
81
Notes to the Consolidated Financial
Statements
•
Going concern
106
Company Statement of Financial Position
107
Company Statement of Changes in Equity
108
Notes to the Company Financial Statements
ADDITIONAL INFORMATION
113
Glossary
113
Shareholder Information
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transactions!
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Look out for our key icons throughout this report:
Investors
New
Consumers and Advertiser
1
st
in the EU
Our People
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Strategic aim
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Environment and Community
1
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in the EU
new
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
2
3
STRATEGIC REPORT
Operational highlights
Leadership position
2
was maintained
(in times vs. closest competitor)
1
Alternative performance measure (see Note 4 to the consolidated financial statements on pages 89 to 90).
1
Note: there were changes in the cookie consent policy (general obligation to consent with all cookies that are not strictly necessary for website operation) and internet browsers
policy of more strict control of 3rd party cookies on websites. Both mentioned reasons result in loss of data collected by web analytics services like Google Analytics.
2
Leadership position is based on time on site except for Auto24. Auto24 has no significant vertical competitor, the next relevant player is Generalist portal, therefore, the relative
market share for this Generalist portal is calculated by multiplying time on site by the percentage of active automotive listings out of total listings at the end of the reported period.
3
In Jobs & Services business line B2C revenue comes from Jobs only.
4
Car listings only (excluding listings of vehicle parts, vehicles other than cars and other categories).
5
In Jobs & Services business line C2C revenue principally comes from Services portals, therefore only Services platforms’ information is presented.
6
Skelbiu.lt only, which is our main Generalist portal.
7
Over 95% of respondents answered YES to both questions: “Do you feel proud to be part of the BCG team?” and
“Would you recommend your friends to work here?” in our annual
employee engagement survey.
Autoplius
2024
2023
2022
2021
Auto24
Aruodas
KV plus City24
in Estonia
CVbankas
Skelbiu
17
19
7
23
7
36
Financial highlights
Revenue
+
19
%
2024: €72.1 million
2023: €60.8 million
2022: €51.0 million
Each Baltic resident visits BCG portals
10 times per month
56.0
m
Operating profit
+
32
%
2024: €38.3 million
2023: €29.1 million
2022: €13.6 million
Adjusted
operating profit
1
+
21
%
2023: €54.5 million
2023: €45.3 million
2022: €38.5 million
EBITDA
1
+
20
%
2023: €55.3 million
2023: €46.0 million
2022: Adjusted EBITDA
1
€39.3 million
EBITDA margin
1
expanded to
77
%
2024: 77%
2023: 76%
2022: Adjusted EBITDA margin
1
77%
+
40
%
Basic EPS
2024: 6.5 € cents
2023: 4.7 € cents
2022: 0.2 € cents
+
20
%
Adjusted basic EPS
1
2024: 9.2 € cents
2023: 7.7 € cents
2022: 6.4 € cents
Cash generated from
operating activities
+
23
%
2024: €59.0 million
2023: €48.0 million
2022: €34.1 million
Cash conversion
1
maintained at
99
%
2024: 99%
2023: 99%
2022: 99%
Leverage
1
decreased to
0.5
x
2024: 0.5x
2023: 1.0x
2022: 1.7x
Monthly
traffic
1
2024: 56.0 million
2023: 61.9 million
2022: 65.1 million
Cultural highlights
The total amount of CO
2
emissions includes
Scope 1 and Scope 2 (market-based), tonnes
of carbon dioxide equivalent. Change in
emissions calculated from a 2022 base year
Total CO
2
emissions
70
%
decrease by
2023: 100
2024: 54
2022: 183
Strategic Highlights
The Group’s objective is to provide trusted marketplaces to
connect sellers and buyers across the Baltic region through
user-friendly and feature-rich portals, resulting in a smooth
transaction experience for all involved parties.
We believe the Group accomplishes this goal through
its portfolio of leading brands, individually strong market
positions, and scalable business model.
Our objective is to sustain profitable
growth by implementing gradual price
adjustments
for
our
core
classifieds
portals, bolstered by compelling value
propositions and the introduction of new
products and features. Additionally, we
plan
to
continue
expanding
ancillary
services
and
selectively
acquire
complementary businesses within our
current markets and potentially in new
territories.
Note: we are presenting our financial year results, therefore “2024" means 12 months ended 30 April 2024, "2023" means 12 months ended 30 April 2023
and "2022" means 12 months ended 30 April 2022.
B2C monthly number
of users grew across all
business lines
Auto +4%
(to 3,732 from 3,586 in 2023)
Real Estate +1%
(to 4,926 from 4,877 in 2023)
Jobs
3
+5%
(to 2,271 from 2,162 in 2023)
B2C average monthly revenue
per user (ARPU) grew across
all business lines
Auto +26%
(to €289 from €230 in 2023)
Real Estate +22%
(to €181 from €148 in 2023)
Jobs
3
+7%
(to €412 from €384 in 2023)
C2C monthly number
of active ads (listings in
Generalist) grew significantly
Auto
4
+26%
(to 33,695 from 26,824 in 2023)
Real Estate +20%
(to 20,016 from 16,628 in 2023)
Services
5
+32%
(to 8,560 from 6,461 in 2023)
Generalist
6
+5%
(to 99,271 from 94,388 in 2023)
C2C monthly revenue per
active ad (per listing on
Generalist)
Auto
4
+0%
(€20 in both 2024 and 2023)
an arithmetic result of significant
growth in active ads
Real Estate +0%
(€23 in both 2024 and 2023)
an arithmetic result of significant
growth in active ads
Services
5
+11%
(to €24 from €22 in 2023)
Generalist
6
+3%
(to €7 from €6 in 2023)
95
%
more
than
Employee
engagement
Gender
diversity
of employees who are proud
to be part of the BCG team
stays above 95%
7
(2024: > 95%, 2023: > 95%)
Our team continues to be
balanced
(female : male headcount,
as at 30 April each year)
(2023: 51:49, 2022: 51:49)
50
:
50
Strategic Highlights
continued
Chair’s Statement
Our relentless focus on the core business of each of our 14
portals across the Baltic regions continues to reap rewards.
Trevor Mather,
Chair
“
Employees
Our people are critical to our success
and it’s reassuring to see the results of
our engagement survey reflect back to
us that our employees love working with
us too! This is particularly apparent in the
average employee tenure of 8 years, which
in a business with such a high percentage
of technologists is nothing short of
remarkable.
The Group is led by a deeply knowledgeable
management team, both at the Group level
and the individual Portal level, who are
passionate,
dedicated
and
committed
to building a long-lasting culture of rapid
decision making, lean operations, trust
and fun. We recognise that culture is a
huge part of our success story.
We are proud of our employees and know
the strength they bring to our organisation.
For more on our Purpose and Culture
see page 10 and our People see pages
30 to 34.
Environment, Social and
Governance
There are some important differences that
come with a business listed in the UK with
operations purely in the Baltics region,
so we do sometimes have to look at
matters such as diversity or remuneration
through a different lens. However, we
are committed to being a responsible
business. Our priority is to protect and
support our people, customers and all of
our stakeholders and the environment
around us.
We have reduced our absolute Scope
1 and 2 emissions by 70% from a 2022
base year and achieved our goal of having
at least 80% of used electricity derived
from renewable energy sources by 2025
by increasing the portion of electricity
derived from renewable sources from 63%
in 2022 to 88%. We are working toward our
net zero target and as part of our net zero
journey we reported our Scope 3 carbon
emissions for the first time.
We
ranked
within
the
top
10
best
performers
within
FTSE
250
in
the
FTSE Women leaders review 2023 and
maintained our average employee tenure
at 8 years.
I am proud to sponsor the Group’s ESG
working group and am actively involved
with ESG activities.
For more on our ESG see pages 22 to
37.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
5
STRATEGIC REPORT
The operating leverage of the business began to flow through now that the ongoing costs
of being a public company are fully baked into the financial performance.
Trevor Mather,
Chair
“
Chair's Statement
continued
Returns to Shareholders and
dividends
The Board is confident in our ability to
continue our capital policy of returning
all of our surplus cash to shareholders,
through
a
combination
of
paying
dividends and share buybacks. The total
amount of cash returned to shareholders
since IPO through dividends and the share
buyback programme is c. €49 million and
the leverage has reduced from 2.75x at
IPO in July 2021 to 0.50x at the end of this
reporting period.
We initiated a share buyback program
during the prior year with the purpose of
returning cash to shareholders. We are
still actively engaged in this programme.
We are recommending a final dividend
of 2.1 € cents per share for 2024. The
final dividend will be paid, subject to
shareholder approval, on 18 October 2024.
For more details on our capital policy
see the Financial review on page 19.
Looking ahead
I continue to be excited about the future
for BCG and the growth potential and
opportunities to create value not only
for our shareholders but for all of our
stakeholders.
Our strategy remains consistent, relevant
and achievable and I look forward to
reporting more demonstrable progress
against that strategy in the year ahead.
I have personally enjoyed reaching out and
meeting with some of our investor base in
person and I hope to be able to build upon
that in the coming year.
On behalf of the Board, I want to thank
all of our employees for their remarkable
contribution and dedication this year, and
for serving all of our stakeholders so well.
Trevor Mather
Chair
2 July 2024
Overview
The
last
twelve
months
have
been
ones of considerable success for Baltic
Classifieds Group. Our relentless focus on
the core business of each of our 14 portals
across the Baltic regions continues to
reap rewards as does both the quantum
and consistency of our overall revenue
and profit growth in the three years since
becoming a public company.
We continue to have the most visited
portals in Lithuania and Estonia, as well
as maintaining our significant leadership
position over the nearest competitor for
all our largest sites compared to 2023,
despite only a modest investment in
marketing.
Our three verticals (Autos, Real Estate
and Jobs & Services) continue to lead the
high growth revenue charge across the
business, and our fourth business unit
(Generalist) continues to both provide
solid growth and an extended competitive
moat around all of our businesses allowing
most of our advertisers to dual list on the
two best known portals for their particular
category.
Particularly pleasing this year was to see
the operating leverage of the business
beginning to flow through now that
the ongoing costs of being a public
company are fully baked into the financial
performance.
The resilience of the growth despite a
changed market backdrop in the Baltic
regions (with a mild decline in GDP and
lower inflation than recent years) means
we will continue with our current strategy
for the foreseeable future – focusing on
the core of our business, consistently
improving
the
consumer
experience
and constantly evolving the pricing and
packaging of our products.
For more on our Strategy and Business
Model see page 10.
Board
We are fortunate that our Board and its
committees enjoy great stability and
consistency which is the cornerstone to
our effectiveness as a Board.
For more on our Board see pages 42
to 43; Board effectiveness see page 55
and our approach to Diversity see page
54.
As a Board, we are acutely aware of
our obligations to ensure diversity and
inclusion and are actively seeking to
expand our Board in a very considered
fashion with culture, fit, diversity and
succession
planning
all
part
of
our
priorities.
We have been scanning the
market for potential diverse candidates
to expand the Board, with a particular
focus on candidates who have a high
appreciation of the business environment
in the Baltics, Scandinavia and/or Eastern
Europe.
On 11 June 2024, Rūta Armonė joined the
Board as an Independent Non-Executive
Director and will join all of the Board
Committees. Rūta is based in Vilnius and
has worked at Ellex Valiūnas, one of the
most prestigious legal firms in the Baltic
region for 13 years. As an M&A partner at
Ellex Valiūnas, her breadth of skills and
experience will bolster the regulatory,
governance and M&A experience on the
Board.
As part of our succession planning, we will
continue to look out for other outstanding
candidates to further expand the Board in
the years to come to ensure we minimise
the chances of needing to replace large
segments of the Board at any one time in
the future.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
4
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
6
7
STRATEGIC REPORT
0%
5%
10%
15%
20%
3%
6%
9%
12%
15%
5%
6%
7%
8%
Source: Skandinaviska Enskilda Banken (SEB), May 2024
Consumer prices, YoY change
4
Wages, YoY change
4
Unemployment
4
Lithuania
Estonia
Latvia
Euro area
Lithuania
Estonia
Latvia
Euro area
Lithuania
Estonia
Latvia
Euro area
2022
2022
2022
2023
2023
2023
2024F
2024F
2024F
2025F
2025F
2025F
CEO’s Statement
2024
marked
another
year
of
solid
financial,
operational
and
strategic
execution for BCG, with strong momentum
observed across each of our business
segments. We are in the early stages of
our monetisation journey, which underpins
the resilience of our top line and EBITDA
growth, and, we are particularly pleased
that our operational leverage is once again
flowing through to our EBITDA margin now
that public listed company costs have
been normalised.
Our
platforms
have
established
themselves as a key destination for those
looking for transactions in automotive,
real estate, jobs, services and general
merchandise.
The
attractive
business
environment in which we operate - part of
the EU, the euro area and NATO enhances
our prospects for further success and
expansion. And the fact that we are based
in Lithuania, a country which, based on the
World Happiness Report, is renowned for
having the happiest young people in the
world reflects the joy we have in running
this company.
This year, I am pleased to report that the
strongest growth came from our core
classified revenue streams, B2C and C2C,
which together account for 90% of BCG's
revenue. Notably, B2C performance saw
the highest growth at 22% year-on-year,
driven by both an increase in customers
and ARPU growth across all our business
units. Additionally, we observed a steady
recovery
in
C2C
volumes
due
to
a
normalised selling time and exceptional
growth in Services. C2C growth was also
remarkable, achieving an 18% increase
year-on-year, propelled by a 23% rise in
Auto, a 21% increase in Real Estate, and
an impressive 45% growth in Services.
The remaining 10% of the Group's revenue
comprise ancillary and banner advertising
revenue, which combined grew by 6%.
Throughout the year, we successfully
implemented
pricing
and
packaging
changes across all our business units
in both B2C and C2C. The outstanding
results
we
achieved
this
year
have
provided strong momentum as we move
into the next financial year.
I am happy to report that the Estonian
Competition Authority (“ECA”) terminated
its investigations into our Real Estate and
Auto platforms. During the supervision
procedure, the ECA came to the conclusion
that KV.ee, City24.ee and Auto24.ee "have
not set unfairly high prices for the services
they offer".
Strong consumers numbers:
•
On average, a resident in the Baltics
visits one of our sites 10 times per
month.
•
Our site leadership positions
1
are as
strong as ever for all of our largest
websites: Autoplius at 7x (6x in 2023),
Auto24 at 36x (29x in 2023), Aruodas
at 17x (21x in 2023), , KV plus City24 in
Estonia at 19x (16x in 2023), CVBankas
at 7x (9x in 2023) and Skelbiu at 23x
(19x in 2023).
Growth in both B2C and C2C
number of customers:
•
The number of business customers
grew
across
all
business
areas:
automotive dealers +4%; real estate
brokers +1%; customers in Jobs +5%.
•
All business areas saw an increase
in active C2C ads: in Auto +26%; Real
Estate
+20%;
Services
+32%
and
Generalist listings grew +5%.
The combination of increased prices of
goods and services being advertised
on our sites, normalised speed of sale
and changes to our packages, has led to
increased yields across all business areas
and in both the B2C and C2C segments.
Market context:
•
Similar to trends in other countries,
inflation has rapidly declined in Baltic
economies,
reaching
more
normal
levels. Prices in the underlying markets
of real estate and automotive have risen
reflecting rising salaries.
•
The
number
of
used
car
market
transactions over the last 12 months
has grown by 6%. The average price per
used car increased by 5% year-on-year,
while the speed of sale has normalised.
This has led to a 28% increase in the
number of days a vehicle is advertised,
providing a tailwind for the stock of
vehicles on our sites.
•
The number of real estate transactions
declined 11% year-on-year, primarily due
to higher construction costs since 2023
(and consequent lower supply of new
build homes) and increase in the interest
rates. However, estate prices grew 6%
and most of our customers operate in
the secondary market, therefore the
commission pool remained healthy.
In the environment of a lengthening
selling time, BCG was able to double
The attractive business environment in which we operate
- part of the EU, the euro area and NATO enhances our
prospects for further success and expansion.
Justinas Šimkus,
CEO
“
1
Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative market
share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
revenue from developers as a result of
improvements to our sites in terms of
the presentation of new homes and the
associated changes in our pricing.
•
The employment market has been
very active this year, with companies
continuing to face a significant labour
shortage. The number of employers
using Cvbankas.lt increased by 5%.
Average salary grew by over 12%,
prompting companies to increase their
investment in employee search and
selection.
•
More people are seeking to find service
providers
online,
leading
to
rapid
growth in our Services verticals. We
now have 32% more service provider
advertisements on our platforms, and
the yield has grown by 11%.
•
The continuous growth of eCommerce
activities
has
resulted
in
more
transactions moving online. This has
supported the growth of our Generalist
platforms and ancillary products such
as deliveries.
I would like to thank all of my colleagues
for their efforts over the last 12 months.
The
results
of
our
recent
employee
engagement survey reaffirm our belief that
the team's motivation is at an all-time high,
with over 95% of employees expressing
pride in being part of BCG and would
recommend it as a great place to work.
Furthermore, we expect our successes this
year to continue, with healthy growth in
B2C and C2C both in terms of volumes and
ARPU, as well as sustained strong growth
in Services. With an engaged and highly
experienced team, we remain focused
on consistently delivering outstanding
products and services to our customers.
Justinas Šimkus
Chief Executive Officer
28 June 2023
1
Source: Skandinaviska Enskilda Banken (SEB), May 2024.
2
Source: Wordometers, April 2024.
3
Source: Eurostat.
4
Actual figures in 2022-2023 and forecasted figures in 2024-2025.
Market Overview
Macroeconomic overview
The Group operates in the Baltic region,
generating 70% of its revenue for the
financial year from Lithuania, 28% from
Estonia and 2% from Latvia.
For context, the Baltic states, also known
as the “Baltics”, consist of Lithuania,
Estonia and Latvia.
Note: the macroeconomic data in the
Macroeconomic overview is presented
in calendar years, which differ from our
financial year that starts on 1 May and ends
on 30 April.
The Baltic States have been a part of NATO,
the European Union, the euro area and
OECD since:
2004: the Baltic states joined NATO
2004: the Baltic states joined the
European Union
2010: Estonia joined OECD
2011: Estonia joined the euro area
2014: Latvia joined the euro area
2015: Lithuania joined the euro area
2016: Latvia joined OECD
2018: Lithuania joined OECD
The Baltic region has a strong credit profile
with some of the lowest gross public debt
to gross domestic product (“GDP”) ratios in
Europe in 2023: 38.3% in Lithuania, 19.6%
in Estonia and 39.7% in Latvia. These are
significantly below the euro area average of
88.6%.
1
The Baltics have a total population of 5.8
million (Lithuania: 2.7 million, Estonia: 1.3
million and Latvia: 1.8 million)
2
and had a
nominal aggregate GDP of approximately
€150.0 billion in 2023 (Lithuania: €72.0
billion, Estonia: €37.7 billion and Latvia:
€40.3 billion.
3
4.6%
4.1%
Source: Eurostat (data for EU members), The Office for National Statistics (data for United Kingdom).
Real GDP per capita CAGR during calendar years 2000-2023
Lithuania
Latvia
Estonia
Poland
European Union
Germany
France
United Kingdom
Spain
Italy
3.1%
3.7%
1.1%
0.7%
0.9%
0.6%
0.7%
0.2%
The region’s economy has demonstrated
resilience and ability to grow significantly
over the period of last 23 years, with real
GDP per capita growing at a compound
annual growth rate (“CAGR”) of 4.6% in
Lithuania, 3.1% in Estonia and 4.1% in
Latvia from 2000 to 2023, compared to
1.1% in the European Union.
The
Baltic
economies
demonstrated
remarkable resilience to recent adverse
shocks, including the COVID-19 pandemic,
the Russian invasion of Ukraine, energy
and food price surge, high inflation and
high interest rates.
In 2023, the Baltic economies experienced
a mild decline in GDP: (0.3)% in Lithuania,
(3.0)% in Estonia and (0.3)% in Latvia.
1
However, a normalising inflation, a resilient
labour market, anticipated improvement
in foreign demand and declining interest
rates are forecasted to contribute to a
gradual recovery. On average, GDP growth
in the Baltics in 2024 and 2025 is expected
to surpass the euro area average of 0.6%
in 2024 and 1.7% in 2025. GDP growth is
forecasted to be 1.5% in 2024 and 2.8%
in 2025 for Lithuania, (0.5)% and 3.5% for
Estonia and 1.9% and 2.7% for Latvia.
1
The unemployment level in the Baltic
countries remains low and is forecasted
to stay near the euro area average in
the coming years. In 2023, the average
unemployment level was 6.8% in Lithuania,
6.4% in Estonia and 6.5% in Latvia.
As projected, inflation in the Baltics eased
in 2023 after a year of high double-digit
levels, dropping to 8.7% in Lithuania, 9.1%
in Estonia and 9.0% in Latvia. Inflation is
expected to decrease further in 2024 to
1.0% in Lithuania, 3.5% in Estonia and 1.5%
in Latvia.
The Baltic countries have a trend towards
higher wage inflation, which is also part of
increasing prosperity of the region. In 2023,
despite a slowdown in the economy, labour
markets showed resilience and wages
increased by 12.2% in Lithuania, 11.4% in
Estonia and 7.5% in Latvia.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
8
9
STRATEGIC REPORT
1
Number of transactions in Lithuania and Estonia, including vehicles that were registered in these countries for the first time.
2
The home ownership rate measures the share of the population who are owner-occupants with or without a mortgage. Source: Statista, 2022.
3
Source: Company information.
4
Source: Swedbank, March 2024.
5
Average apartment price per square metre in Vilnius, Tallinn and Riga during calendar years 2021, 2022 and 2023.
6
Total number of real estate transactions in Lithuania, Estonia and Latvia.
Average used vehicle price, €K
New vehicle transactions, K
Used vehicle transactions, K
Source: Company information (average used vehicle
price); Regitra, Autotyrimai and Maanteeamet (number of
transactions)
Average used vehicle price and total
transactions
1
2022
446
496
50
9.4
2023
437
487
50
11.2
2024
464
517
53
11.8
Baltic Classifieds Group operates Auto
portals in Lithuania and Estonia. Over
the past 12 months the used car markets
in
Lithuania
and
Estonia
have
been
influenced by rebounding supply, increased
car affordability due to rising consumer
incomes, and more favourable conditions
for sourcing used cars from abroad.
Additionally, the upcoming introduction of a
car tax in Estonia has led to increased local
market activity within the country.
During this financial year, the number of
new car transactions increased by 5% to
52 thousand per year, while the number
of used car transactions increased by 6%
to 464 thousand per year, combined in
both Lithuanian and Estonian markets.
The growth of the used car market was
driven by continued recovery in used car
imports in Lithuania, where they represent
a significant portion of dealer business,
and by more active local markets in both
countries.
The average price of a used car has
remained stable for the last three half-year
periods, but, on average, it is 5% higher
than the previous financial year, at €11.8
thousand. Consumer demand continues to
be strong and steady, supported by rising
household incomes, ensuring that there is
no affordability pressure on vehicle prices.
The increasing number of transactions,
combined with price growth and more
favourable acquisition costs in Western
European markets for used cars, has
contributed to the expansion of the dealer
margin pool.
The rebounding supply and inventory levels
on our marketplaces have resulted in a 28%
increase in the time it takes for dealers to
sell a used car compared to last year. While
this metric remained unchanged in Estonia,
it significantly increased in Lithuania,
where inventory and supply are recovering
from an all time low in 2022.
The Group operates an online jobs board
in Lithuania. Over the past 12 months
ending April 2024, employer activity has
shown much more stability, with job
posting
numbers
remaining
relatively
consistent with the previous year, in
contrast to the significant year-over-year
fluctuations
observed
earlier.
Despite
ongoing
geopolitical
tensions
and
economic headwinds, the number of job
advertisements listed on our jobs portal
remained significantly higher than pre-2022
levels. This indicates a continued strong
demand for workers in the Lithuanian job
market.
A tight labour market has supported
strong wage growth. Over the past 9 years,
the compound annual growth rate for
average gross wage was a notable 10%,
showcasing consistent and substantial
salary increases.
1
During the calendar year
2023, the average gross wage in Lithuania
increased by 12%. Growing wages support
the trend of higher investment in employee
search and selection.
The
average
unemployment
rate
in
Lithuania
has
slightly
increased
from
5.9% to 6.8% in the calendar year 2023.
However, the number of employed persons
in Lithuania increased in the calendar year
2023 and reached the highest level since
2007.
1
Jobseekers' activity continues to grow
rapidly, rebounding from the post-pandemic
stagnation. This growth is supported by the
inflow of workforce from foreign countries.
Over the past 12 months, there has been
a significant surge in applications on
CVbankas.lt, with a 19% increase compared
to the previous year.
The Group operates services portals in
Lithuania, Latvia and Estonia. Examining
the service providers market, we have
observed a significant increase in activity
in 2024. Since 2023, the number of active
advertisements on our Services portals
has risen by 32%. The main drivers behind
this growth was the increasing popularity
and traffic to the portals, as well as the
impact of the acquired portals GetaPro in
Latvia and Estonia in 2023. The growing
number of clients and leads encouraged
more service providers to advertise. The
slowdown in the macro environment has
further catalysed this growth.
The Group operates online classifieds
portals in the real estate markets of
Lithuania, Estonia and Latvia. The home
ownership rates in Lithuania, Estonia and
Latvia are some of the highest in Europe:
89% (16% with mortgage or loan), 82%
(27% with mortgage or loan) and 83%
(13% with mortgage or loan) respectively.
2
Accordingly,
secondary
market
transactions in the region are popular and
account for the majority of real estate
transactions.
3
During the last 12 months ending April
2024, the Baltic real estate market was
affected by several factors, including a
rapid increase in interest rates, geopolitical
tensions, and a slowdown in the economy.
These factors led to an 11% decrease in
the number of real estate transactions in
2024, bringing the total to 195 thousand
transactions.
This
figure
includes
90
thousand residential and 105 thousand
non-residential
real
estate
and
land
transactions.
Real estate prices have demonstrated
resilience despite the decline in market
activity. In the calendar year 2023, the
average price per square metre of an
apartment for sale in the Baltic capitals
increased by 6%. This price increase is
supported by the solid financial situation
of real estate developers and elevated
construction costs.
4
As a result, decreased real estate demand
in the region and elevated prices have
led to longer selling times and increased
inventory on our real estate portals. This
provides visitors with a larger array of
property choices.
Real estate transactions, K
Source: State Enterprise Centre of Registers Lithuania,
Land Register Latvia, Land Board Estonia
2022
271
2023
219
2024
195
1
Source: The Lithuanian Department of Statistics.
2
E-commerce retail value RSP (retail selling price) excl. sales tax in calendar years. Figures updated as per changes in Euromonitor data (May 2024).
The Group operates Generalist portals
in Lithuania and Estonia. The COVID-19
pandemic restrictions in 2020 and 2021
significantly boosted e-commerce growth
in these countries. As a result, more
customers turned to online shopping,
leading to an increase in the number of
online buyers, sellers, and transactions.
The Lithuanian and Estonian e-commerce
markets experienced significant growth,
with a combined CAGR of approximately
20% from calendar year 2017 to 2019, 37%
from 2019 to 2021, and 15% from 2021 to
2023. Although growth slowed in 2022 and
2023 compared to the peak pandemic years
of 2020 and 2021, it remained strong. This
sustained growth continued to support
our Generalist platforms and ancillary
products, such as delivery services.
E-commerce market growth
2
Source: Euromonitor
2017
516
382
898
2018
628
469
1,097
2019
753
542
1,295
2020
1,057
712
1,769
2021
1,434
996
2,430
2022
1,748
1,086
2,834
2023
1,941
1,301
3,242
2024E
2,100
1,416
3,516
2025E
2,264
1,506
3,770
2026E
2,421
1,591
4,012
2027E
2,572
1,665
4,237
2028E
2,733
1,737
4,470
Lithuania, €m
Estonia, €m
Automotive market
Real estate market
Jobs & services market
Generalist market
Market Overview
continued
Market Overview
continued
Average apartment price
5
and real estate
transactions
6
Average apartment price per m
2
, €K
Source: Swedbank
2021
2022
2023
1.9
2.2
2.3
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
10
11
STRATEGIC REPORT
Our business model
Our success stems from a proactive,
consumer-focused business model that
integrates both specialised (vertical) and
general (horizontal) online portals, as
shown in the table on the next page.
Our
brands
include
vertical
portals
tailored to specific industries, facilitating
advertising, promotion and sales within
those sectors. These portals attract a
significant number of loyal and returning
business customers (B2C subscribers
with contracts). They are also widely used
by individual customers and the general
public (C2C users engaging in one-time
transactions and returning to our portals
every few years to transact), enriching
our portals with unique, hard-to-replicate
content.
In addition, we operate horizontal or
generalist portals, such as marketplaces,
online auctions, and price comparison
websites,
which
are
popular
among
individual customers and the general
public.
The advantages of this combined business
model are:
•
A wide selection for prospective
consumers, maximising our audience
reach.
•
The ability to cross-list items between
vertical and generalist portals,
expanding reach, increasing available
content, and driving traffic from
generalist portals to higher monetizing
vertical portals.
•
Strong brand awareness across a wide
network.
Our market position
The Group’s portals attract a large and
highly engaged consumer audience.
Our
leadership
2
position
remains
very strong compared to our closest
competitor. The Group’s portals are among
the most visited websites in Lithuania and
Estonia. According to April 2024 ratings
from SimilarWeb, (which also include
websites such as Facebook, Youtube and
local news portals) Skelbiu was the 5
th
,
Autoplius - 7
th
, Auto24 - 10
th
, Aruodas - 14
th
,
KV – 17
th
, Osta - 13
th
in their respective
countries.
Our strategy
Our successful business model,
combining
vertical
and
generalist
platforms,
is
sustained by strategic decisions, including:
•
Investing in fit-for-purpose, long-term
technology:
We develop all technology
in-house
and
on
a
portal-specific
basis, allowing an agile approach while
sharing components and applications
across the platforms. This investment
has created a scalable infrastructure
capable of handling increasing traffic
levels.
•
Focusing
on
cash
generation
with
excellent margins:
Our market leadership
and strong brand identity enable low
marketing expenditures. Additionally,
our organisational structure supports
shared corporate functions and minimal
capital expenditure.
•
Talent
recruitment
and
retention:
We attract and retain a highly skilled
and efficient workforce. Our core HR
objective is to recruit high-potential,
motivated
employees
and
provide
them with opportunities for growth and
development.
For our strategic aims see Moving our
Strategy Forward on pages 13 to 15.
Our purpose and culture
BCG exists to connect consumers
with advertisers, facilitating easier
transactions.
The Group’s purpose, values, and strategy
are closely aligned with its culture. Our
governance
framework,
organisational
structure,
and
culture
significantly
contribute to the successful delivery
of our business model and support our
overarching purpose.
To achieve our purpose, we focus on the
following strategic goals:
•
Enhancing the transaction experience.
•
Providing the easiest solutions for
sellers and buyers to connect.
•
Ensuring a simple advertising process
for our consumers and advertisers.
•
Being the primary solution for our
consumers’ and advertisers’ transaction
needs.
See pages 47 to 48 for information on
our Stakeholders and our approach to
engagement.
See pages 22 to 37 for information on
our approach to Sustainability.
Our Business at a Glance
We love
transactions!
BCG is a collection of the leading online
classifieds websites across real estate,
cars and jobs in the Baltic region. The
Group is proud to be operating 14 online
portals as shown in the Our brands section
on the following page.
Our portals are among the most visited
sites
in
Lithuania
and
Estonia.
The
majority of the Group’s traffic is direct,
with a combination of direct and organic
unpaid search channels accounting for
86% of total traffic. Paid search traffic is
minimal, and our total marketing expenses
are less than 2% of Group revenue.
Based on the number of user visits and the
number of online listings across the Group
portals, BCG is foremost in the online
classifieds market. In 2024, the Group’s
portals were visited on average 56.0
1
million times per month which means that
on average, a resident in the Baltics visited
one of our sites 10 times every month.
We consider using our portals as one of
the easiest and most effective ways to
reach those interested via advertising and,
therefore, to transact auto, real estate,
and other items, as well as job seeking,
recruiting or locating a service provider.
1
Note: The changes in the cookie consent policy, which now require general consent for all cookies not strictly necessary for website operation, have impacted data collection.
Additionally, internet browsers have implemented stricter controls on third-party cookies, leading to a loss of data collected by Google Analytics. As a result, the statistics in Google
Analytics are incomplete and show a decline in total visits to our portals.
2
Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative market
share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
1
Calendar years.
2
Calendar year 2023. Source: Skandinaviska Enskilda Banken (SEB), May 2024.
3
Source: Economic Freedom of the World Annual Report, 2023.
4
Source: World Bank’s Doing Business report, 2020.
5
Source: Digital Quality of Life, 2023.
6
‘EU27+’: the 27 European Union Member States, Iceland , Norway , Switzerland , Albania , Montenegro , North Macedonia , Serbia and Turkey. Source:
eGovernment Benchmark 2022.
Our brands
Lithuania
Estonia
Latvia
Automotive
Real Estate
Jobs & Services
Generalist
% of BCG revenue
for 2024
38%
25%
19%
18%
(Jobs)
(Services)
(Services)
(Services)
Why invest in us
Attractive business environment
Western-minded and
business-oriented
•
Part of EU and
NATO
since 2004
1
•
Part of the euro
area
since
2011-2015
1
•
Part of OECD
since 2010-2018
1
38%
in Lithuania
20%
in Estonia
40%
in Latvia
vs
89%
euro area average
4.6%
in Lithuania
3.1%
in Estonia
4.1%
in Latvia
vs
1.1%
EU average
Low public debt
Ease of doing business
High digital quality of life
gross public debt to GDP ratio
2
Real GDP per capita
CAGR 2000-2023
#12
Lithuania
#12
Estonia
#25
Latvia
#11
Lithuania
#18
Estonia
#19
Latvia
#2
Lithuania
#2
Estonia
#20
Latvia
Economic freedom
in respect to the economic freedom
globally
3
in respect to ease of doing
business globally
4
in electronic security globally
5
eGovernment
maturity score
#8
Lithuania
#2
Estonia
#9
Latvia
GDP growth exceeds
EU avg
in eGovernance maturity score
ratings in the “EU27+”
6
Our Business at a Glance
continued
BCG is a collection of the leading
online classifieds websites across
real estate, cars and jobs in the
Baltic region.
“
1
st
in the EU
Baltic Classifieds Group PLC Annual Report and Accounts 2024
12
1
Alternative performance measure (see note 4 to the consolidated financial statements on pages 89 to 90). 2023-2024 EBITDA and 2022 adjusted EBITDA.
2
Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore, relative market
share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
3
Source: Google Analytics, 2024.
4
Source: SimilarWeb data, 2024.
5
Annual BCG employee survey, 2024.
Moving our Strategy Forward
Our priority
We are committed to being a responsible
business.
Our
priority
is
to
protect
and
support
our
people,
customers,
Stakeholders and the environment around
us.
Our purpose is to connect consumers with
advertisers and help them transact more
easily. Every day we connect buyers and
sellers and facilitate transactions from
cars and real estate, job offers to services
and consumer goods from professional
and
private
advertisers.
The
digital
marketplaces we operate promote trust,
fairness and efficiency.
Our strategic pillars
1
2
3
4
to enhance the
transaction experience
provide the easiest
solution for the sellers
and buyers to find each
other
ensure simple way
of advertising for our
consumers and listers
be the main solution
for our consumers and
listers transaction needs
For more on our culture see pages 30 to 34.
For more on Engagement with our Stakeholders see pages 47 to 48.
For more on our ESG see pages 22 to 37.
Responsible business and
Environment, Social and
Governance (“ESG”)
The Sustainable Development Goals
(“SDGs”) (also known as the Global
Goals), were adopted by the United
Nations in 2015. Our approach to
responsible
business
aligns
quite
naturally with the goals and we have
identified five that are most material to
our business and where we contribute
the most:
Gender equality
Decent work and economic
growth
Responsible consumption and
production
Climate action
Peace, justice, and a strong
institution
Our stakeholders
Investors
Consumers and
Advertiser
Our People
Suppliers
Regulatory bodies
Environment and
Community
Our Company values
and behaviours
The values and behaviours that
we believe in are:
•
Trustworthiness
•
Entrepreneurship
•
Less is more
•
Getting things done
•
Marketplace is our hobby
•
Work is fun
Baltic Classifieds Group PLC Annual Report and Accounts 2024
13
STRATEGIC REPORT
Proven track record and strong financial position
Strong foundations support our growth
Early in monetization
journey
We are a clear leader
Strong revenue growth
Exceptional EBITDA
1
margin
Go-to destination
Benefiting from synergies
Experienced and diverse
team
Highly engaged team
Committed to sustainability
Highly cash generative
Our take rates are lower than
those of our international peers
7x
Autoplius
36x
Auto24
17x
Aruodas
19x
KV and City24 in Estonia
7x
CVBankas
23x
Skelbiu
Leadership position
2
in number of times
against closest competitor
BCG is a collection of the leading
2
online
classifieds websites across real estate, autos,
jobs, services and general merchandise in the
Baltics.
77%
56.0m visits per month
Group’s portals were visited on average 56.0
million times a month
3
. This equals to each
resident in the Baltics visiting our site 10 times
per month.
#1 horizontal and
#1 vertical portals
reinforce each other
A combination of verticals and horizontals
brings a lot of synergies and allows covering
the wider market
8 and 13 y. of tenure
average 8 years of tenure per employee
and average 13 years of tenure per Senior
Management employee
50:50
the split between women and men in our
organisation
>95%
more than 95% of our employees feel proud to
be a part of the BCG team
5
70%
reduced our Scope 1 and 2 carbon emissions by
70% since 2022
99%
Cash conversion
1
19%
Revenue CAGR, 2021-2024
Robust EBITDA
1
growth
Deeply penetrated
Fragmented customer base
Strong Balance Sheet
19%
EBITDA CAGR, 2021-2024
0.5x leverage
1
compared to 2.75 at IPO in July 2021
86%
The majority of the Group’s traffic
4
is direct,
with a combination of direct and organic unpaid
search channels
50% B2C and 39% of C2C
Core classifieds revenue amounts to 90%.
Having a significant part of C2C ads to
customer fragmentation.
Our Business at a Glance
continued
The Group is considered to be at an
early monetisation stage. The primary
growth driver and focus of the Group is to
drive increased monetisation of its core
services, by increasing average revenue
per B2C lister and average revenue from
each C2C lister. Increased monetisation
can take different forms, including pricing
actions
and
product
and
packaging
development, enabling upsell and cross-
sell.
How we measure progress
•
Revenue
•
C2C yield
1
•
B2C average revenue per user (ARPU)
2024 progress
We ended our year 2024 with the highest
ever yearly revenue in all four business
units.
Group’s revenue grew 19% to €72.1
million
(2023: €60.8 million).
The robust growth across all four business
lines was primarily driven by strength in
the core business.
The growth came from
B2C and C2C
which are the core revenue
streams and together
now represent 90%
of BCG revenue. B2C and C2C revenue
grew 22% and 18% respectively.
Improvements
to
our
products
and
packages for B2C customers supported
price increases in our Auto, Real Estate
and Jobs business lines towards the end
of the H1 this year.
Monthly ARPU has
grown across all business lines.
At the beginning of the reporting period,
we implemented a C2C pricing event that
increased the price per listed C2C ad.
Associated risks
•
Geopolitical risk
•
Risk of disruption to our customer and /
or supplier operations
•
Competition risk
•
Laws & regulations risk
•
Technology risks
The Group will continue to leverage the
existing strong market positions of its
portals, high brand recognition and traffic
to drive more listings and traffic across
its portals. As more listings are added,
consumer audience traffic is expected to
increase, and the more traffic increases,
the more attractive the portals are, which
again
attracts
more
listings.
These
network effects are expected to continue
to support more revenue growth through
an increased income from listing fees,
subscription
fees
and
other
revenue
sources.
How we measure progress
•
Audience lead versus closest competitor
•
Traffic to our sites
2024 progress
The Group is highly penetrated. Due to its
leading market positions and strong brand
affinity, the Group’s portals attract a large
and highly engaged consumer audience.
During the last years, all
our leading sites
have maintained their significant audience
lead
2
over the closest competitor
(based
on the time spent on site data from
SimilarWeb).
With a large and engaged consumer
audience, the Group’s brands are widely
known
and
thus
organically
attract
advertisers to advertise products for sale,
resulting in the Group’s portals having
leading content that in turn attracts more
consumer traffic. However, changes in the
cookie consent policy, which now require
general consent for all cookies not strictly
necessary for website operation, have
impacted data collection. Additionally,
internet
browsers
have
implemented
stricter controls on third-party cookies,
leading to a loss of data collected by
Google Analytics. As a result, the statistics
in
Google
Analytics
are
incomplete
and show a decline in Group’s traffic.
According to Google Analytics, during
2024 we had on average 56.0 million
visits per month,
which equates to every
resident in the Baltics visiting our sites 10
times per month, making the portals the
go-to place for consumers to shop.
Associated risks
•
Geopolitical risk
•
Risk of disruption to our customer and /
or supplier operations
•
Competition risk
•
Laws & regulations risk
In addition to increasing monetisation of
the core classifieds services, the Group
aims to grow revenue by offering ancillary
products and services, with the overall
objective of enhancing the transaction
journey of consumers and advertisers in
the Baltic markets.
How we measure progress
•
Developments
•
Innovations
•
Partnerships
2024 progress
Auto.
In Lithuania we have upgraded and
expanded the car history check, introduced
a new data product, that enables business
customers to analyse competitors and
benchmark their performance.
In Estonia, we re-launched the car history
check service with a new user interface
and tighter integration with Auto vertical,
which acts as a data source and marketing
channel.
Real Estate.
In Lithuania, we introduced
a new prominence package for business
clients.
In Estonia, we launched a new product
for the property rental market in Estonia,
allowing landlords and tenants to sign
rental contracts through our platform.
Jobs & Services.
On our Jobs board
in
Lithuania,
we
developed
tools
to
streamline the job candidate selection
process. Employers can now use filters
to quickly identify the best candidates
that match their criteria and easily access
potential employees in the CV database.
On our Services platform in Lithuania, we
introduced the option for service providers
and customers to sign service agreements
directly within the platform.
On our Latvian and Estonian Service
platforms
we
focused
on
enhancing
content quality.
Generalist.
In Estonia we introduced a "buy
now, pay later" feature, providing buyers
with an easy financing alternative for their
purchases. We also launched a parcel self-
service platform that aggregates popular
parcel delivery providers.
In Lithuania, on our price comparison
website,
we
continuously
work
on
improving content quality. Last year, we
added over 25,000 item specifications,
enhancing user experience and boosting
our SEO efforts.
More details in our Operational Review
(page 20).
Associated risks
•
Competition risk
•
Technology risks
Drive
monetisation
of core services
Drive more
listings and traffic across
the Group’s portals
Grow ancillary
revenue through existing
and new partnerships
Our strategic aims
1
"Yield" refers to the average monthly revenue per active (Auto or Real Estate) or listed (Generalist) C2C listing.
2
Audience lead. Leadership position based on time on site except for Auto24. Auto24 has no significant vertical competitor; the next relevant player is Generalist portal; therefore,
relative market share is calculated based on time on site proportion relating to the number of active automotive listings as at the end of the reported period.
While the Group already demonstrates
high operating leverage, operational and
cost efficiency, it is committed to continue
optimising
costs
and
maintaining
high
cash
conversion.
However,
the
commitment to a lean and efficient
organisation does not prevent the Group
from making strategic investments, for
example in technology, to maintain its
market-leading position and strong value
proposition for listers and consumers,
and to support the sustainability of a
growing organisation. The Group has a
robust process of assessing business
areas requiring further investments, and
a streamlined approach to implementing
internal change, with recent examples
including the increased investment in the
technology team and additional security
infrastructure.
How we measure progress
•
EBITDA
1
and EBITDA margin
1
•
Operating profit
•
Adjusted operating profit
1
•
Cash generated from operating
activities
•
Cash conversion
1
•
Basic EPS
•
Adjusted basic EPS
1
2024 progress
Year 2024 profitability was the highest
ever.
Our
EBITDA grew 20% to €55.3 million
(€46.0 million in 2023) and ended our year
with 77% EBITDA margin (76% in 2023).
Adjusted operating profit up 21% to €54.5
million
(2023: €45.3 million).
Operating profit up 32% to €38.3 million
(2023: €29.1 million).
Cash generated from operating activities
was up 23% to €59.0 million
(2023: €48.0
million).
Cash conversion maintained at 99%
(99%
in 2023).
Basic EPS up 40% to 6.5 € cents
(2023: 4.7
€ cents).
Adjusted basic EPS up 20% to 9.2 € cents
(2023: 7.7 € cents).
Associated risks
•
Geopolitical risk
•
Risk of disruption to our customer and /
or supplier operations
•
Technology risks
•
Laws & regulations risk
One of the capital policy priorities is to
continue considering value-creating M&A
opportunities.
The
Group
constantly
evaluates
its
portfolio to optimise value creation and
is continuing pursuit of attractive options
for inorganic growth, particularly through
bolt-on
acquisitions
and
in-market
consolidation within the Group’s existing
markets, and potentially new markets
outside of the Baltics with a strong focus
on similarly high-quality, market-leading
businesses.
How we measure progress
Filling in the “gaps” in the matrix of
geographies and business lines
2024 progress
There were no acquisitions this year. Last
year, in July 2022, we acquired GetaPro
services platforms in Latvia and Estonia.
GetaPro business and strategy integration
is progressing well - we continue applying
best practices from our existing Services
vertical in Lithuania.
Associated risks
•
Acquisition risk
BCG is committed to being a responsible
business and our priority is to protect
our people and continue to protect the
environment around us.
Climate change is treated as a Board-level
governance issue. The ESG working group
that was formed in 2022 evidences our
commitment to ensuring as a business we
keep progressing with our climate change
agenda.
We are highly focused on providing a
safe,
happy,
and
supportive
working
environment and we are continuously
looking for ways to improve internal
communications to ensure our employees
stay connected and feel engaged.
How we measure progress
•
Total CO
2
emissions
•
Employee engagement level
•
Gender diversity
2024 progress
During 2024 we made progress in our
net zero journey by reporting our Scope
3 carbon emissions for the first time and
reducing our impact on the environment:
•
we reduced the total CO
2
emissions in
direct operations by 70% from a 2022
base year and
•
increased the portion of electricity used
from renewable sources from 63% in
2022 to 88%, while
•
emission-free electricity was increased
from 66% in 2022 to 99%.
During the year we have conducted an
employee engagement survey and were
pleased that, in line with last year, more
than 95% of our employees answered YES
to both questions
“Do you feel proud to be part of the BCG
team?” and
“Would you recommend your friends to
work here?”.
We acknowledge the significance of gender
diversity and take pride in concluding the
year with an equal female-to-male ratio of
50:50 (as of the end of 2023: 51:49).
Associated risks
•
Climate change risk
Continuously improve the Group’s
scalability and maintain high levels
of operational efficiency while
making necessary investments
Pursue strategic
opportunities through
acquisitions
Promote circular economy
and minimise our own impact
on the environment
1
Alternative performance measure, see note 4 to the consolidated financial statements.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
14
15
STRATEGIC REPORT
Moving our Strategy Forward
continued
Moving our Strategy Forward
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
16
17
STRATEGIC REPORT
1
In Jobs & Services business line B2C revenue comes from Jobs only; C2C revenue principally comes from Services portals, therefore only Services platforms’ information is
presented.
2
Car listings only (excluding listings of vehicle parts, vehicles other than cars and other categories).
3
Skelbiu.lt only, which is our main Generalist portal.
4
ARPU - average revenue per user.
Financial Review
In 2024 Group’s revenue grew 19% to
€72.1 million (2023: €60.8 million) as
a consequence of a growth in all four
business lines, underpinned by strength in
the core business:
•
The Auto business line grew by 24%.
B2C grew 31% and C2C grew 23%.
•
The Real Estate business line grew by
20%. B2C grew 24% and C2C grew 21%.
•
The Jobs & Services business line grew
by 17%. B2C (Jobs) grew 12% and C2C
(mainly Services) grew 45%.
•
Generalist business line, which is
largely C2C, grew 8%.
Over the past 3 years since the IPO,
revenue quality has improved as core
classifieds revenue streams, B2C and
C2C, as a percentage of revenue, have
increased from 83% to 90%. B2C revenue,
representing 50% of Group revenue, grew
22% and C2C, representing 39% of Group
revenue, grew 18%. Ancillary revenue,
accounting for 5% of total Group revenue,
grew by 13%, while advertising revenue,
the most vulnerable revenue stream and
also accounting for 5% of Group revenue,
declined by 1%.
The main drivers of revenue growth
continue to be the increase in the number
of advertisements and active C2C listings,
the rise in the number of advertisers
across all business sectors, and the
We have achieved our strongest financial results to date,
with a c.70% increase in revenue and EBITDA compared to
our IPO three years ago.
Lina Mačienė,
CFO
“
higher average spend per customer and
advertisement across our business.
In May 2023, at the beginning of the period
currently reported on, we introduced C2C
pricing and packaging changes across
most of our portals, impacting the entire
financial year. In September and October
2023,
we
introduced
B2C
price
and
package changes for the Auto, Real Estate
and Jobs portals, reflecting improvements
to our proposition. These contributed to
the second half of the year in both Real
Estate and Auto business lines and in
Jobs, since the majority of our contracts
are year-long, it is rolling out throughout
12 months.
€m
30-Apr-24
30-Apr-23
Bank loan principal amount
50.0
70.0
Customer credit balances
3
2.4
2.4
Total debt
52.4
72.4
Cash
(24.9)
(27.1)
Net debt
27.5
45.3
EBITDA
2
LTM
55.3
46.0
Leverage
0.5x
1.0x
2024, €m
2023, €m
Change
Labour costs
11.3
9.6
18%
Advertising and marketing services
1.0
1.0
7%
IT expenses
0.8
0.7
15%
Other
3.6
3.5
5%
Operating cost excluding depreciation
and amortisation
16.8
14.8
14%
Depreciation and amortisation
16.9
17.0
0%
Operating cost
33.8
31.8
6%
1
Yield refers to the average monthly revenue per active C2C ad (in Auto, Real Estate, Services), per C2C listing (in our Generalist) or ARPU in B2C. ARPU is monthly average revenue
per user (in Auto – per dealer, in Real Estate – per broker, in Jobs – per company).
2
Alternative performance measure, see note 4 for further details.
3
Customer credit balances relate to amounts held by customers in e-wallets and are included within trade and other payables as well as cash and cash equivalents.
We
continue
seeing
strengthening
network effects across all business units
as a growing number of customers drive
content, which in turn encourages greater
engagement for our audience.
The number of B2C customers grew
across all business lines:
•
Automotive dealers grew by 4% (from
3,586 in 2023 to 3,732 in 2024) mainly
due to small dealers switching to B2C
subscriptions
rather
than
placing
advertisements as C2C customers.
•
Real Estate brokers grew 1% from 4,877
in 2023 to 4,926 in 2024.
•
Jobs' number of customers grew 5%
from 2,162 in 2023 to 2,271 in 2024.
In
C2C,
the
number
of
active
advertisements and listings grew across
all business lines. In Auto, Real Estate and
Generalist the growth was primarily driven
by the underlying market conditions, i.e.
longer selling time (which means each
advert is active for more time). The growth
in Services active advertisements number
was driven by the growing client base
using our platform.
In terms of average revenue per user
(ARPU) in our B2C segment:
•
Auto ARPU was up 26% due to pricing
and packaging changes implemented
mid-2023 (in September and October
2022)
and
most
recent
price
and
packaging changes done in mid-2024
(in September and October 2023). We
also saw an upside from recovering
inventory
levels
as
dealers
were
increasing their packages.
•
Real Estate ARPU was up 22% due
to subscription fee and packaging
changes which took place mid-2023 and
mid-2024. The changes implemented
from September 2022 to January 2023
were aimed at both growth in ARPU
and incentivising customers to choose
individual and more expensive premium
packages for brokers. This year's annual
pricing
actions
were
implemented
during September and October 2023.
•
Jobs ARPU was up 7% due to reduced
volume discounts. CVbankas, being the
market leader, is well-positioned to take
advantage of a vibrant employment
market with low unemployment rates,
ensuring continued revenue growth.
Price
changes
were
implemented
on new and renewing customers in
September 2022 and were rolling out
to the customers through the 12-month
cycle until autumn this year. This year
the new prices were introduced in
September 2023, and like last year, are
rolling out to the customers through the
12-month cycle.
In terms of yield
1
in our C2C segment:
•
We
implemented
price
changes
and observed an uptick in average
transaction
values
which
have
a
positive impact on our revenues due
to
value-based
pricing.
However,
arithmetically
the
monthly
revenue
per active advertisement in Auto and
Real Estate remained unchanged, as a
consequence of customers opting for
longer duration packages, leading to
extended durations of advertisements
on our sites.
•
Services
average
monthly
revenue
per active advertisement was up 11%
mainly due to price changes and an
increased usage of our value-added
services.
•
Generalist average revenue per listing
was up 3% due to price changes and
rising average transaction values in the
automotive and real estate categories,
partly offset by change in mix of
advertisement categories.
Operating costs
Our costs represent a relatively small
proportion of our revenue and, due to
continued cost management, inflation did
not significantly affect our profitability.
Most of our operating costs are people
costs. It is close to 16% of Group revenue.
During the year, the BCG team expanded
C2C - monthly revenue per active ad/revenue per listing C2C (€)
Auto
2
Real Estate
Services
1
Generalist
3
revenue
per active ad
revenue
per active ad
revenue
per active ad
revenue
per listing
0%
20
23
24
7
20
23
22
6
0%
+11%
+3%
2024
2023
Auto
+4%
3,732
4,926
2,271
3,586
4,877
2,162
+1%
+5%
Real Estate
Jobs
1
no. of dealers
no. of brokers
no. of customers
2024
2023
B2C - monthly number of dealers/brokers/companies
by business line
Auto
Real Estate
Jobs
1
ARPU
ARPU
ARPU
+26%
289
181
412
230
148
384
+22%
+7%
2024
2023
B2C - monthly ARPU
4
(€)
Auto
2
Real Estate
Services
1
Generalist
3
no. of active ads
no. of active ads
no. of active ads
no. of listings
+26%
33,695
20,016
8,560
99,271
26,824
16,628
6,461
94,388
+20%
+32%
+5%
2024
2023
C2C - monthly number of active ads/listings by business line
to 140 FTEs. The average number of FTEs
during the year has grown by 4% from
131 in 2023 to 136 in 2024. Investment
in our people increased by 18% to €11.3
million, up from €9.6 million in 2023.
Most of the increase in people costs
was driven by more people in the team,
annual salary reviews and the buildup
cost of a performance share plan (“PSP”)
amounting to €2.2 million, compared to
€1.6 million in 2023.
Our marketing costs amount to 1.4%
of revenue. As a portfolio of brands, we
minimise spending on external service
providers by advertising on our own sites
at no cost. Other Group costs include IT,
which are 1.2% of revenue, and general
administrative expenses, which are 5.0%
of revenue. We have supported several
non-governmental organisations (NGOs)
assisting Ukraine during the war, a local
teachers’
development
organisation
‘Choosing
to
Teach’
and
other
organisations with donations totalling
€0.2 million (2023: €0.1 million).
Net finance expense
Our finance expenses primarily consist
of interest expenses, calculated at a
1.75% margin plus Euribor, totalling €3.5
million, compared to €2.6 million in 2023.
Additionally our finance costs include
commitment fees related to a €10.0
million unsecured and undrawn Revolving
Credit Facility (“RCF”). Finance expenses
are partly offset with finance income from
cash balances held in banks, resulting
in a net finance expense of €3.4 million,
compared to €2.7 million in 2023.
Net debt and leverage
In 2024, we voluntarily repaid €20.0 million
of the existing debt.
Compared to the end of 2023, net debt
2
decreased by €17.8 million to €27.5 million
(from €45.3 million in 2023). We ended the
year with leverage
2
ratio of 0.5x, down
from 1.0x in 2023.
Financial Review
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
18
There were no add-backs to our EBITDA
in the periods reported. Our EBITDA grew
20% to €55.3 million (2023: €46.0 million).
The EBITDA margin expanded by 1% point
to 77% (2023: 76%).
Adjusted operating profit increased by
21% to €54.5 million (2023: €45.3 million),
while reported operating profit grew by
32% to €38.3 million (2023: €29.1 million).
BCG intends to return one third of adjusted
net income each year via dividend. For
this purpose, we show amortisation of
acquired intangibles and the associated
tax effect along with the adjusting items in
the table below. Adjusted net income grew
18% to €45.0 million (2023: €38.0 million).
Profit for the period increased to €32.0
million (2023: €23.2 million).
Tax
The Group tax charge for the year was €2.9
million (compared to €3.2 million in 2023),
representing an effective tax rate of 8%
(down from 12% in 2023). This tax charge
comprises:
•
Current tax expense of €4.1 million
(2023: €4.9 million). The decrease in
current tax expense in 2024 is due
to a one-off tax credit of €1.8 million.
This credit, an adjusting item to our
profitability measures, relates to 2021
and resulted from a new interpretation
of the Corporate Income Tax law by the
Tax Authority in Lithuania, following a
court ruling.
•
Unwind of deferred tax of €1.2 million,
mainly from deferred tax on acquired
intangibles (2023: €1.8 million, including
€1.4 million deferred tax from acquired
intangibles).
2024
2023
Change
EBITDA
1
55.3
46.0
20%
EBITDA margin
1
77%
76%
1% pt
D&A
(16.9)
(17.0)
(0%)
Operating profit
38.3
29.1
32%
Add back: amortisation of acquired intangibles
16.2
16.2
0%
Adjusted operating profit
1
54.5
45.3
21%
Net finance costs
(3.4)
(2.7)
27%
Profit before tax
34.9
26.4
32%
Income tax expense
(2.9)
(3.2)
(9%)
Profit for the period
32.0
23.2
38%
Add back: corporate income tax credit from 2021
(1.8)
-
n/m
Add back: deferred tax impact on acquired intangibles amortisation
(1.4)
(1.4)
-
Adjusted net income
1
45.0
38.0
18%
Basic EPS (€ cents)
6.5
4.7
40%
Adjusted basic EPS
1
(€ cents)
9.2
7.7
20%
Profitability and Alternative
Performance Measures
The
Group
has
identified
certain
Alternative
Performance
Measures
(“APMs”) that it believes provide additional
useful information on its performance.
These APMs are not defined by IFRS and
are not considered to be a substitute for,
or superior to, IFRS measures. These
APMs may not be directly comparable to
similarly titled measures used by other
companies.
Directors use these APMs alongside IFRS
measures for budgeting, planning, and
reviewing business performance.
For APM descriptions and reconciliation
to IFRS measures, see note 4.
Earnings per share (“EPS”)
Basic EPS grew 40% and was 6.5 € cents
based on the weighted average number of
shares of 489,975,882 (2023: 4.7 € cents
based on weighted average number of
shares of 496,082,891). Diluted EPS also
round to 6.5 € cents (2023: there was no
dilution effect on EPS from the employee
share arrangements).
Adjusted basic EPS grew 20% to 9.2 €
cents (2023: 7.7 € cents).
Cash flow and cash conversion
Cash generated from operating activities
grew 23% to €59.0 million (2023: €48.0
million). Cash conversion
1
continues to be
maintained at 99% (2023: 99%). Net cash
inflow from operating activities grew 20%
to €51.2 million (2023: €42.7 million).
Capital allocation
Net
cash
generated
from
operating
activities was used for:
•
Paying the final dividend for the year
2023 of 1.7 € cents per share in October
2023, totalling €8.4 million.
•
Paying the interim dividend for the year
2024 of 1.0 € cents per share in January
2024, totalling €4.9 million.
•
Buying
back
Company
shares
for
cancellation for €19.3 million (2023:
€5.7 million).
•
Reducing the loan liability by paying
down debt by €20.0 million (2023: €14.0
million).
Financial Review
continued
Financial Review
continued
1
Alternative performance measure, see note 4 for further details.
1
Alternative performance measure, see note 4 for further details.
The capital allocation policy remains
unchanged. Our plan is to use all the cash
we generate in a year, within that same
year or shortly thereafter. We intend to:
•
Return one third of adjusted net income
each year via an interim and final
dividend, split approximately one third
and two thirds, respectively. If approved
at the AGM, the final dividend for the
year 2024 will be paid on 18 October
2024 to members on the register on 13
September 2024. Dividends are declared
and paid in euro. Shareholders can elect
to have dividends paid in British Pound
Sterling. Currency election deadline for
2024 final dividend is 27 September
2024.
•
Continue
considering
value-creating
M&A
opportunities.
All
options
for
financing
attractive
acquisition
opportunities remain open, including
using our cash, increasing our debt and
even seeking additional equity capital.
However, using own cash is the most
likely and would most likely not affect
dividends but might reduce capacity for
share buy-backs.
•
Use a combination of share buy-backs
and debt repayment for the balance of
cash.
We keep our capital policy under review
and may revise it from time to time.
Going concern
The Group generated significant cash from
operations during the period. As of 30 April
2024, the Group had not drawn any of the
€10.0 million unsecured Revolving Credit
Facility (“RCF”) and had cash balances
of €24.9 million. The €10.0 million RCF is
committed until July 2026.
Lina Mačienė
Chief Financial Officer
2 July 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
19
STRATEGIC REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
20
21
STRATEGIC REPORT
Operational Review
Our third successful year as a public
listed company has passed. We continue
operating business in the BCG way -
consistently entrepreneurial, agile, and
pragmatic whilst holding a long-term
perspective.
We have maintained a hybrid working
culture which blends office and remote
work. Feedback tells us this model is
highly appreciated by our teams, who
remain
exceptionally
stable,
engaged
and capable of developing products and
features across all our business lines.
Here we look at our key product
developments in 2024 by business line:
Auto
We have upgraded and expanded the
car history check service to the whole
Lithuanian market and have re-launched
this service in Estonia. It now features a
new user interface and tighter integration
with Auto24.ee, which serves as a data
source and marketing channel. It is a
natural extension of our marketplace
offering.
We
are
offering
standalone
reports for buyers to purchase with
a
potential to include them in the higher-tier
business customer packages. Additionally,
we introduced a new data product on
Autoplius.lt, enabling business customers
to analyse competitors and benchmark
their performance against other market
players.
We introduced the rating system for the
highest tier car dealers on Autoplius.
lt. This system allows them to ask for
feedback from car buyers which builds
both trust and competitive advantage. Our
experience is that ratings motivate dealers
to further improve the experience they
provide for car buyers which enables car
buyers to make a better choice.
Real Estate
In Aruodas.lt and KV.ee we introduced a
new prominence package for business
clients. This package includes bump-ups
of listings which effectively increase the
number of impressions and leads. We
also upgraded the KV.ee property history
tool, helping buyers navigate the latest
developments in the real estate market
better.
In Estonia, together with our partners, we
launched a new product for the property
rental market. Landlords and tenants now
have the option to sign rental contracts
through our platform, benefiting both
parties significantly. Firstly, background
checks
are
conducted
on
potential
tenants and a score is provided to help
landlords
make
informed
decisions.
Secondly,
compensation
to
landlords
for property damage is ensured through
third-party
insurance.
Tenants
benefit
from a balanced rental agreement, 24/7
emergency service, insurance for property
damage, and rental payment protection
in case of their inability to pay. This
approach also offers clear advantages for
our platform. By facilitating these rental
agreements, we can get recurring revenue
throughout the rental period instead of a
one-time payment.
We continue operating business in the BCG way - consistently
entrepreneurial, agile, and pragmatic whilst holding a long-term
perspective.
Simonas Orkinas,
COO
“
Jobs & Services
In CVbankas.lt we developed tools to
simplify the selection of job candidates.
Employers
can
now
set
filters
to
quickly
identify
the
best
candidates
that fit their criteria and easily access
potential employees in the CV database.
Additionally, we established a partnership
with the Lithuanian startups association
Unicorns
Lithuania,
supporting
its
members in their employment journey
by providing additional exposure on our
platform.
Paslaugos.lt
introduced
the
option
to
sign
service
agreements
between
service providers and customers within
the platform. This feature is viewed as a
convenient tool for users and a valuable
data source for the platform.
In GetaPro we focused on improving
content quality. We encourage service
providers to add more information to
their profiles and collect more feedback,
which helps them achieve higher listing
positions.
Generalist
In Osta.ee we introduced a "buy now, pay
later" functionality, which provides buyers
with an easy financing alternative for their
purchases. We also launched a parcel self-
service platform that aggregates the most
popular parcel delivery providers. This
convenient tool is not limited to Osta.ee
users and can be used to send items sold
on any marketplace.
In the price comparison service Kainos.lt,
we are continuously working on improving
content quality. Last year we added over
25,000 item specifications, enhancing the
user experience and benefiting our SEO
efforts.
In addition to these consumer-facing
developments, substantial progress has
been made behind the scenes. In 2024
we successfully upgraded our production
hardware,
continuously
tested
and
improved our disaster recovery plans, and
implemented new payment methods to
better meet customer needs and optimise
costs.
Simonas Orkinas
Chief Operating Officer
2 July 2024
Section 172(1) Statement
“Promoting the success of the
Company for the benefit of all its
Stakeholders.”
"In order to promote the success of
the Company for the benefit of all its
Stakeholders, the Directors confirm that
they have acted with the long-term success
of the Company in mind for the benefit
of Shareholders, in accordance with the
Companies
Act
2006
Section
172(1)
(a) to (f). The Board of Baltic Classifieds
Group PLC acknowledges all legal duties
specifically S171 to S177 Companies Act
2006. The Board primarily engages with
employees and Shareholders, but also
stays informed about other Stakeholders'
issues
through
Executive
Directors,
reports from Senior Management, and
external advisors."
Pages 47 to 49 outline the ways in which
we have engaged with key Stakeholders
and focuses on the following key areas:
•
Who the key Stakeholders are and the
issues that matter the most to each
Stakeholder group
•
How the Board engages with and has
oversight of those Stakeholder groups
•
Board priorities, key actions and
principal decisions and how they tie
into Section 172(1) (a) to (f)
The Board views "Principal Decisions"
as decisions that have important long-
term effects and consequences for the
Company and/or its Stakeholders. These
decisions are different from the regular,
routine decision-making processes the
Board typically undertakes.
Further information as to how the Board
has had regard to S172(1)(a) to (f) can be
found in the following pages:
Where can you find more in our Annual Report
Page
S172(1)(a) Consequence of any decision in the long-term
Moving our Strategy Forward
13
Risk Management
38
Board Leadership and Company Purpose
46
S172(1)(b) Interests of employees
Section 172(1) Statement
21
Engagement with our Stakeholders
47
Sustainability Report
22
Board Leadership and Company Purpose
46
Statement of Engagement with Employees
69
Board activity and culture
46
Board priorities, key actions and principal decisions
49
Non-financial and Sustainability Information Statement
36
S172(1)(c) Fostering business relationships with suppliers, customers and others
Moving our Strategy Forward
13
Section 172(1) Statement
21
Engagement with our Stakeholders
47
Board Leadership and Company Purpose
46
Statement of engagement with other business relationships
69
Non-financial and Sustainability Information Statement
36
S172(1)(d) Impact of operations on the community and the environment
Moving our Strategy Forward
13
Section 172(1) Statement
21
Engagement with our Stakeholders
47
Board Leadership and Company Purpose
46
Non-financial and Sustainability Information Statement
36
S172(1)(e) Maintaining high standard of business conduct
Moving our Strategy Forward
13
Section 172(1) Statement
21
Engagement with our Stakeholders
47
Board Leadership and Company Purpose
46
Non-financial and Sustainability Information Statement
36
S172(1)(f) Acting fairly between members
Section 172(1) Statement
21
Engagement with our Stakeholders
47
Division of Responsibilities
50
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
22
23
STRATEGIC REPORT
Sustainability Report
Overview of our ESG strategy
BCG is committed to being a responsible
business and our priority is to protect
our people, support our customers and
Stakeholders and continue to protect the
environment around us.
Our Environmental, Social and Governance
(“ESG”) strategy can be split into two main
components:
•
being a sustainable business by limiting
our impact on the environment, providing
a secure and diverse workplace for
our employees and ensuring strong
governance; and
•
helping
customers
to
make
more
sustainable choices and encouraging
a circular economy through four of our
business lines: Real Estate, Auto, Jobs
& Services and Generalist.
The Board has reviewed and approved the
ESG strategy.
Our ESG working group makes sure we
follow and continue to evolve our strategy
and make progress towards our goals.
The ESG working group consists of five
members,
including
three
Executive
Directors
and
two
other
employees.
The Chair, together with Non-Executive
Director Jurgita Kirvaitienė, are actively
involved in ESG activities and attend ESG
working group meetings on demand.
During 2024, the ESG working group met
four times. The following topics have
been discussed by the ESG working group
during the year:
•
progress towards our ESG targets;
•
new gender diversity targets;
•
the Group’s carbon footprint;
•
Scope 3 reporting;
•
forthcoming ESG reporting
requirements;
•
feedback from our investors on ESG
related issues;
•
climate-related risks and opportunities;
and
•
BCG score in ESG rating agencies.
Areas of focus for the ESG working group
in the next financial year will be:
•
tracking our progress against ESG
targets;
•
tracking our Scope 1, 2 and 3
emissions; and
•
focusing on forthcoming ESG reporting.
The Board fully supports the initiatives of
the ESG working group and gives Board-
level oversight of environmental, social
and governance issues and achievement
of our ESG goals. Environmental, social
and governance matters are included
in the Board’s formal annual schedule
and are regularly discussed during the
meetings.
ESG highlights 2024
Alignment with the UN SDGs
Environmental
Social
Governance
•
GHG Emissions
•
Air Quality
•
Energy Management
•
Water & Wastewater
Management
•
Waste & Hazardous Materials
Management
•
Ecological Impacts
•
Physical Impacts of Climate
Change
•
Labour Practices
•
Employee Health & Safety
•
Employee Engagement,
Diversity & Inclusion
•
Access & Affordability
•
Product Quality & Safety
•
Customer Welfare
•
Selling Practices & Product
Labelling
•
Product Design & Lifecycle
Management
•
Business Model Resilience
•
Supply Chain Management
•
Materials Sourcing & Efficiency
•
Human Rights & Community
Relations
•
Customer Privacy
•
Data Security
•
Business Ethics
•
Competitive Behaviour
•
Management of the Legal &
Regulatory Environment
•
Critical Incident Risk
Management
•
Systemic Risk Management
Environmental
Social
Governance
•
Reported our Scope 3
carbon emissions for the
first time
•
Reduced our absolute Scope
1 and 2 emissions by 70%
from a 2022 base year
•
Achieved our goal to have at
least 80% of used electricity
derived from renewable
energy sources by 2025
by increasing the portion
of electricity derived from
renewable sources from 63%
in the base year 2022 to 88%
•
Offset our Scope 1 and
2 carbon emissions and
achieved carbon neutrality
across our direct operations
• Set gender diversity goals
• Ranked within top 10
best performers in FTSE
Women leaders review 2023
(FTSE250)
• Expanded our employee
training disclosure with
employee training statistics
• Maintained our average
employee tenure at 8 years
• Completed employee
engagement survey that
showed that more than 95%
of employees are proud to be
a part of BCG team
• Maintained gender diversity
with a split of women/men:
50:50
• Donated €0.2 million to
selected charitable causes
• Introduced new policies:
AI Policy, Confidential
Information Policy, Code
of Conduct, Supplier Code
of Conduct and Disaster
Recovery Policy
• Improved our data security
practices with 2FA
authentication for e-mail
boxes and MDM (mobile
device management) solution
in Lithuania
• Continued to evolve with
the requirements of GDPR
by carrying out optimisation
for personal data deletion
processes
• Increased awareness of cyber
security and GDPR through
employee training
Reporting frameworks
We continue to evolve our Environmental,
Social and Governance (‘ESG’) reporting to
meet the requirements of leading industry
frameworks
and
our
stakeholders’
expectations. BCG has aligned its ESG
reporting to the Task Force on Climate-
related Financial Disclosures (TCFD) and
to the principles of the Sustainability
Accounting
Standards
Board
(SASB)
framework
for
Internet
and
Media
Services. We have also identified the
UN
Sustainable
Development
Goals
(‘SDGs’), which we believe we can make a
meaningful contribution to.
Disclosure index for the Task Force on
Climate-related Financial Disclosures
(TCFD) framework can be found on
page 24.
Disclosure index for the Sustainability
Accounting Standards Board (SASB)
framework can be found on page 37.
ESG materiality assessment
In order to have a successful sustainability
strategy in the long run, an understanding
of which ESG topics are the most material
to BCG is crucial. In 2023, we performed
a materiality assessment and identified
the most material ESG topics for BCG.
As part of this process, we considered
various topics raised by investors, ESG
rating agencies, Senior Management and
employees to determine the ESG issues
most relevant to our business and industry
where we may be able to have the biggest
impact. We reviewed several ESG reporting
frameworks and ultimately selected the
SASB Standards based on its industry-
specific alignment to what we believe are
material ESG issues to BCG. The six most
material sustainability issues which were
agreed by the Board as focus areas for
BCG are listed below, together with other
sustainability matters that we care about:
The Sustainable Development Goals (“SDGs”) were adopted by the United Nations in 2015. Our
approach to responsible business aligns quite naturally with the goals and we have identified five
that are most material to our business and where we contribute the most.
Helping customers to make more sustainable choices
We take pride in the fact that many of the Group's portals play an important role in encouraging the circular economy and the reuse
and repair of undesirable assets. As a result, they offer a green commerce channel that allows consumers and businesses to become
more environmentally conscious while also preventing secondary items from being disposed of, being recycled, or being put out of
use. Additionally, the online nature of the transactions facilitated by the Group all contribute to minimising carbon emissions related to
unnecessary travel, as well as saving time and resources for our customers.
Auto
We place a high priority on promoting environmentally
friendly new technologies and introducing cleaner,
more effective fuel kinds. To make it simpler for people
to look for more environmentally friendly vehicles, our
Auto websites have made certain steps:
•
extra fields for electric vehicle listings: range and
battery capacity;
•
information on emissions, the rate of the pollution
levy and fuel usage in auto ads;
•
informative articles and videos for consumers
about electric vehicles and models that are
currently on the market.
Jobs & Services
Our Jobs & Services portals also help our advertisers
and consumers make more environmentally friendly
decisions, reducing GHG emissions brought on by
needless travel:
•
customers may locate the services they require
online on our Services portals;
•
jobseekers and recruiters may connect through our
Jobs site online;
•
remote workplace location tags and travel to work
time and distance information help jobseekers find
positions with less daily travel required.
Environment
Generalist
Our online classifieds and marketplace portals not only
offer one of the best ways for customers to advertise
and find goods and services across the Baltics, but
they also direct clients towards decision that promote
circular economy and are socially responsible:
•
by purchasing used goods on our Generalist portals
rather than brand-new ones, fewer products need
to be made and end up in landfills, reducing GHG
emissions and material waste;
•
rubbish collection services on our portals can
only be offered by licensed providers, helping our
clients in making more sustainable decisions as
unlicensed suppliers may harm the environment.
In order to control the content and combat
illegal rubbish collectors, we also work with local
authorities;
•
pet category listings require specific information
about pets, such as the seller's registration number
and the pet's microchip number. We also work with
local authorities to promote ethical and pet-friendly
breeding.
Real Estate
In the Baltics, which have some of the highest home
ownership rates in Europe, residential real estate is a
significant industry. The Group's Real Estate online
listings portals play a vital role in the Baltic real estate
market, which enables us to significantly improve the
real estate industry's environmental performance. We
hope to save time and resources for clients, as well as
decrease needless trips to estate agents' offices and
inappropriately described properties by these features
of our Real Estate portals:
•
high quality photos, 3D tours, video tours, floor
plans, and property descriptions online;
•
location of a listed property on a map, providing
both a route and street view option;
•
information on heating costs, the energy class, air
quality in a particular location, including information
on ambient air pollutants, nitrogen dioxide (NO2)
and coarse particulate matter (PM10).
Sustainability Report
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
24
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STRATEGIC REPORT
The Task Force for Climate-Related Financial Disclosure
(“TCFD”) Report
TCFD compliance statement
We support the Task Force on Climate-
related Financial Disclosures ("TCFD") and
its recommendations and are committed
to assessing the impacts of climate risks
and opportunities across our operations
and supply chains. This year we focussed
on understanding the full scope of our
direct and indirect carbon emissions
and
making
progress
towards
our
environmental targets.
The following material climate-related
financial
disclosures
are
consistent
with
the
four
overarching
thematic
recommendations, supported by the 11
recommended disclosures. (As per the
TCFD additional guidance “Implementing
the Recommendations of the Task Force
on Climate-related Financial Disclosures”
(2021 TCFD Annex) which was released in
October 2021.)
TCFD governance
Board oversight of climate-related risks
and opportunities
The Board has overall responsibility for
the Group’s preparedness for adapting to
climate change. To ensure the Board has
sufficient oversight of climate change
issues, the Board has established an
ESG working group, consisting of three
Executive
Directors
and
two
other
employees, and assigned climate-related
responsibilities to the working group.
The ESG working group reports to the
Board and regularly updates the Board on
climate related risks and opportunities,
as well as progress against targets
addressing climate related issues. For
more information on the ESG working
group, see the Sustainability Report on
page 22.
During the year ended 30 April 2024, the
Board included climate-related topics in
four of the Board’s meetings. In October
2023,
the
Board
reviewed
progress
towards our environmental targets and
forthcoming
environmental
reporting
requirements. In February 2024, the Board
reviewed the Group’s 2024 H1 emissions,
discussed identified Scope 3 activities and
methodologies and approved the Group’s
Scope 3 business goals. In March 2024,
the Board reviewed climate change risks
and opportunities as part of an annual
ESG Risk Register review. In April 2024, the
Board received and discussed the results
of
an
annual
employee
engagement
survey.
Climate-related issues are also considered
when
reviewing
business
activities,
strategic objectives, risk management
or annual budgets. Climate-related risks
are included into the overall Group’s Risk
Register and reviewed on a regular basis. In
2023, the Group included an environmental
TCFD disclosure index
The following table shows where recommended TCFD disclosures can be found:
TCFD recommended disclosure
Compliance
Governance
1.
Describe the board’s oversight of
climate-related risks and opportunities
2.
Describe management’s role in
assessing and managing climate-
related risks and opportunities
The Board’s oversight of climate-related
risks
and
opportunities
and
Senior
Management’s role in assessing and
managing
climate-related
risks
and
opportunities are described in the TCFD
governance section of this TCFD Report.
Strategy
3.
Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium and
long-term
4.
Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy
and financial planning
5.
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate
scenarios
The material climate-related risks and
opportunities and the impact they may
have on the Group have been identified
and are disclosed in the Climate strategy
section of this TCFD Report.
The climate-related risks and opportunities
were
stress-tested
in
three
different
climate scenarios and the resilience of
our strategy is described in the Climate
strategy section of this TCFD Report.
Risk management
6.
Describe the organisation’s processes
for identifying and assessing climate-
related risks
7.
Describe the organisation’s processes
for managing climate-related risks
8.
Describe how processes for
identifying, assessing and managing
climate-related risks are integrated
into the organisation’s overall risk
management
The Group’s processes for identifying,
assessing and managing climate-related
risks are described in the Climate-related
risk management section of this TCFD
Report.
Climate-related risks are captured and
documented in the Group’s Risk Register
in the same manner other risks are
documented. This process is described
in the Climate-related risk management
section of this TCFD Report and the Risk
management section of the Strategic
Report on pages 27 and 38.
Metrics and targets
9.
Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with
its strategy and risk management
process
10.
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 GHG emissions,
and the related risks
11.
Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets
Our environmental targets are described
in the Environmental metrics and targets
section of this TCFD Report.
Scope 1, 2 and 3 GHG emissions, energy
consumption, water consumption and
information
on
electricity
are
also
disclosed in the Environmental metrics
and targets section on pages 27 to 29.
and includes climate-related risks and
opportunities. The ESG working group
organises an annual update for climate-
related risks and opportunities with the
Senior Management. Senior Managers, as
risk owners, are responsible for assessing
and managing climate-related risks for
their respective business areas. They
follow and prepare for new environmental
regulations, changing market tendencies
and increasing customer environmental
awareness. The ESG working group is
responsible for assessing and managing
climate-related risks that are general
to the Group and monitoring emerging
regulatory requirements.
Climate strategy
Climate-related risks and opportunities
Due to our business model, the Group
operates in a low-carbon environment,
where the environmental impact of the
Group is low. However, the accelerating
climate change may have an impact on
the business. In 2024, the Group reviewed
the list of physical and transition risks as
well as climate-related opportunities that
may arise in the future.
Physical risks resulting from climate
change can be event driven or associated
with
longer-term
shifts
in
climate
patterns. Transitioning to a lower-carbon
economy may entail extensive policy,
legal, technology, and market changes
to address mitigation and adaptation
requirements related to climate change.
The
Group
considered
climate-related
physical
and
transitional
risks
and
opportunities that could potentially arise
during three different time horizons:
•
Short term (up to 3 years)
•
Medium term (up to 10 years)
•
Long term (over 10 years)
The Group also considered the risks
and opportunities across the four main
business lines:
•
Auto
•
Real Estate
•
Jobs & Services
•
Generalist
Senior Management also discussed the
potential impact of the identified climate-
related risks and opportunities in relation
to
financial
planning,
business
and
strategy, including impact on products
and services, supply chain and adaptation
to climate change.
See
the
following
tables
where
we
discuss: physical risks, transition risks
and opportunities, including related time
horizons in which they are most likely to
arise.
Specific risk
Description of risk and its impact
Business line &
Time horizon
Physical risks
Increased severity of
extreme weather events
Increased severity of extreme weather events due to accelerating global warming may disrupt
commercial customers' behaviour, affect the availability of websites and result in disruption to the
provision of services from our service providers. These consequences may lead to a decrease in
revenue.
All business lines
Rising mean temperatures
Rising mean temperatures may result in heatwaves, which would increase cooling costs in offices
and data centres.
All business lines
Extreme variability in
weather patterns
Extreme weather patterns may increase heating costs in our offices in the winters and cooling costs
in our offices and data centres in the summers.
All business lines
Transitional risks
Higher taxation on
transactions of internal
combustion engine vehicles
Increasing the current taxation on transactions of internal combustion engine vehicles may reduce
the volume of adverts, which would result in lower revenue from the Auto segment.
Auto
Internal combustion engine
vehicles ban
Internal combustion engine car ban in the Baltics may lead to reduced volume of ads. The new law in
the EU envisions a total ban on the sale of new diesel and gasoline cars by 2035.
Auto
Consumers switching to
electric vehicles
If consumers shift to electric vehicles, we will have to tailor our business by adding additional filters
and features to improve the search and sales of electric vehicles.
Auto
New regulations reduce real
estate stock on the market
If stock is reduced on the market due to increasing environmental regulations, like restrictions on
energy use, requirements for energy performance certificates and other environmental data, the
volume of transactions and ads will decrease, leading to a decrease in revenue from the real estate
segment.
In addition to that, if property detail reporting becomes more onerous for non-professionals/privates
due to increasing environmental regulations, the volume of ads from privates may decrease, leading
to decrease in revenue of real estate segment.
Real Estate
Opportunities
Opening of new market
segments, such as
advertising EV charging
infrastructure
Increasing environmental regulations and awareness may create new market segments, such as
electric vehicle charging infrastructure. This would allow us to develop and launch services in the
Auto segment, for instance, integrating charging station offerings into electric vehicle ads, which
may result in higher revenue.
Auto
Introduction of yearly
internal combustion engine
vehicle ownership tax
While increasing the current taxation on transactions of internal combustion engine vehicles may
reduce the volume of ads, the introduction of yearly internal combustion engine vehicle ownership
tax may lead to willingness to switch to less polluting vehicles which would result in higher volumes
of ads on our platforms. This would increase revenue in the Auto segment.
Auto
New environmental
regulations reduce
mortgage availability
Reduced mortgage availability due to environmental regulations may decrease the number of
transactions leading to increase in the length of ads being advertised and as a result higher revenue
in the Real Estate segment.
Real Estate
Increased cost of materials
Climate change and environmental regulations may result in increasing raw material prices.
Increased prices in the primary market may increase the activity in the secondary market and
consequently increase the number of ads and revenue in Generalist portals.
Generalist
Increased climate
awareness
Increased climate awareness and people shifting to a circular economy may increase the activity
in the secondary market and consequently increase the number of ads and revenue in Generalist
portals.
Generalist
Fulfilling environmental
reporting and sustainability
goals
Achieving our climate-related goals and being an environmentally responsible business may lead
to enhanced reputation with Shareholders, customers and investors, an increase in share price and
revenue. Improved reputation may also result in higher availability and lower cost of capital.
All business lines
Short term
Medium term
Long term
Sustainability Report
continued
Sustainability Report
continued
strategic aim into the Group’s strategy.
Because of the business nature, during the
financial year there were no other material
changes to business activities and plans
nor additional expenditure, acquisitions
or divestitures budgeted for the next year,
regarding climate change.
Management’s role in assessing and
managing climate-related risks and
opportunities
The ESG working group is in charge
of the ESG Risk Register, which is a
subsection of the Group’s Risk Register
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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STRATEGIC REPORT
Immaterial financial impact
Low financial impact
Medium financial impact
High financial impact
Catastrophic financial impact
Scenario 1
"Orderly"
Scenario 2
"Disorderly"
Scenario 3
"Hot house world"
Policy action
Early policy action
Late policy action
(from 2031)
No policy action
Transition
Smooth transition
Disruptive transition
Business as usual
Time horizons
Short to medium-term
Medium
to long-term
Medium
to long-term
Temperature
Global temperatures
increase to between
1.5-2 degrees above
pre-industrial levels
Global temperatures
increase to between
1.5-2 degrees above
pre-industrial levels
Global temperatures
increase to over 2
degrees above pre-
industrial levels
Sea level rise
Low
Low
High
Risks
Low physical and
transition risks
Higher transition risk
Higher physical risks
Shadow carbon prices
(2010 US$ per tonne of
CO
2
e)
Estimated range:
100-600
Estimated range:
300-400
Estimated range:
0-100
Type of risk /
opportunity
Specific risk / opportunity
Scenario
1 "Orderly"
Timeframe of
impact: short to
medium- term
Scenario 2
"Disorderly"
Timeframe of
impact: medium to
long-term
Scenario 3 "Hot
house world"
Timeframe of
impact: medium to
long-term
Physical risks
Changing weather patterns and increased severity of
extreme weather events
Transitional
risks
Higher taxation on transactions of internal combustion
engine vehicles
Internal combustion engine vehicles ban
Consumers switching to electric vehicles
New regulations reduce stock on the market
Opportunities
Introduction of yearly internal combustion engine vehicle
ownership tax
Opening of new market segments, such as advertising EV
charging infrastructure
New environmental regulations reduce mortgage availability
Increased cost of materials
Increased climate awareness
Fulfilling environmental reporting and sustainability goals
Climate scenarios
After
the
climate-related
risks
and
opportunities
were
identified
and
assessed, they were also stress-tested in
the selected three climate scenarios based
on scenarios published by NGFS (Network
for
Greening
the
Financial
System).
Based on the latest publication by NGFS
(November, 2023), we also considered a
new fourth scenario “Too little, too late”,
which was explored for the first time by
NGFS. Key assumptions from this scenario
are covered in our scenarios 2 and 3, as a
result we decided not to include it in our
analysis. The three scenarios that we
employed in our analysis are as follows:
Orderly:
this scenario
assumes
early,
ambitious action to a net zero CO
2
emissions economy.
Disorderly:
this scenario assumes action
that is late, disruptive, sudden and/or
unanticipated.
Hot house world:
this scenario assumes
limited action, which leads to a hot house
world with significant global warming and,
as a result, strongly increased exposure to
physical risks.
The financial impact on the Group’s
financial planning was assessed by the
Senior Management based on the Group’s
past experience. The financial impact is
summarised in the following table below.
Senior Management has concluded that
the climate-related risks and opportunities
could have an immaterial impact on the
Group’s revenues and costs in scenario
“Orderly” and immaterial or low impact in
Given the uncertainty of the transition to a
low-carbon economy and the temperature
increase limits achieved, the results of
the scenario analysis enable us to better
understand, build resilience and to prepare
for the potential worst case impacts of
climate change. From our analysis we
know that transition risks could potentially
be most significant under “Orderly” and
”Disorderly”, though there are differences
in their timings and materiality of financial
impacts. On the other hand, “Hot house
world” could have the biggest financial
impact due to the physical climate-related
risks. To ensure we are building long-
term resilience as a business, we will use
the outputs of this phase of the TCFD
programme to improve our strategies and
decision making.
The ESG working group will continue to
monitor and analyse climate-related risks
with the oversight of the Board.
Climate-related risk management
The Board has overall responsibility for
risk management and the ESG working
group
is
responsible
for
identifying,
analysing and agreeing the mitigation,
transfer, acceptance or control of climate-
related risks.
We continually develop our capacity and
capability to manage risk and uncertainty
to build and maintain long-term resilience.
Climate-related
risks
are
identified,
assessed and managed according to our
risk management framework (page 38).
Climate-related risks are captured and
documented in the Group’s Risk Register,
identifying the risk category, the likelihood
of the risk occurring, the impact if it does
occur, a specific owner, the risk trend and
the mitigation plan for each risk.
During 2024, we reviewed and updated the
Group’s Risk Register with climate-related
risks and opportunities. These risks and
opportunities are disclosed in the Strategy
section of this TCFD Report.
Sustainability Report
continued
Sustainability Report
continued
scenario “Disorderly”.
Under the scenario
“Hot house world”, physical risks could
have a medium financial impact.
Given the “Hot house world” scenario
assumptions,
Senior
Management
believes that increased severity of extreme
weather events due to accelerating global
warming may have a medium financial
impact on capital expenditures, operating
costs and revenues:
•
extreme weather events may cause
floodings in the areas of our data
centres, that would disrupt the operation
of our servers and temporarily affect
revenues, operating costs and capital
expenditures;
•
extreme weather events may disrupt
the internet connection and temporarily
affect the availability of our websites,
leading to financial impact on revenues;
and
•
extreme weather events may temporarily
impact
commercial
customers’
behaviour during such events, leading
to fewer new advertisements on our
websites and a decrease in revenue.
Management has considered the potential
impact on financial planning that may
arise in the future. For the next financial
year, Senior Management does not foresee
any material impact on the financial
planning that may arise from climate-
related issues.
The assumptions of the scenarios are summarised in the following table:
Our total CO
2
e emissions
1
2024
2023
2022
(base year)
Units
Scope 1 direct emissions
Combustion of fuel and operation of facilities
40.0
43.7
48.6
tonnes CO
2
e
Scope 2 indirect
emissions
2
Purchased electricity, heating and cooling
(location-based)
141.2
151.4
324.3
tonnes CO
2
e
Purchased electricity, heat and cooling
(market-based)
14.5
56.8
134.2
tonnes CO
2
e
Scope 1 & 2 total CO
2
e (location-based)
181.2
195.1
372.9
tonnes CO
2
e
Scope 1 & 2 total CO
2
e (market-based)
54.5
100.5
182.8
tonnes CO
2
e
Scope 3
3
Purchased goods & services
811.1
-
-
Capital goods
95.9
-
-
Fuel and energy-related activities
37.2
-
-
Business travel
9.3
-
-
Employee commuting
(including working from home)
105.8
-
-
Scope 3 total CO
2
e
3
1,059.3
-
-
tonnes CO
2
e
Scope 1,2 & 3 total CO
2
e (location-based)
3
1,240.5
-
-
tonnes CO
2
e
Scope 1,2 & 3 total CO
2
e (market-based)
3
1,113.8
-
-
tonnes CO
2
e
Intensity ratios for Scope 1 & 2 CO
2
e
CO
2
e per employee
4
(location based)
1.3
1.5
3.0
tonnes CO
2
e
CO
2
e per million revenue
5
(location-based)
2.5
3.2
7.3
tonnes CO
2
e
CO
2
e per employee
4
(market-based)
0.4
0.8
1.5
tonnes CO
2
e
CO
2
e per million revenue
5
(market-based)
0.8
1.7
3.6
tonnes CO
2
e
Global energy consumption (Scope 1 & 2)
634.3
670.6
692.8
MWh
Each member of the Senior Management
has
endorsed
the
risk
management
framework
and,
as
risk
owner,
is
responsible for assessing and managing
climate-related risks for their respective
business areas. The ESG working group is
responsible for assessing and managing
climate-related risks that are general
to the Group and monitoring emerging
regulatory requirements.
Environmental metrics and
targets
We recognise that businesses have a
responsibility to protect the environment
and
understand
the
impact
their
operations
have.
In
order
to
better
evaluate the impact our Company has on
the environment we have started reporting
GHG emissions.
The
following
table
summarises
the
Group’s GHG emissions for this financial
year.
1
All emissions incurred by the Group were Global, there were no emissions incurred in the UK.
2
Including the electricity of data centres.
3
No comparable data. Scope 3 emissions presented for the first time.
4
Carbon emissions divided by average number of FTEs during the year - 136 (2023 - 131).
5
Carbon emissions divided by revenue in millions - €72.1 million (2023 - €60.8 million).
Baltic Classifieds Group PLC Annual Report and Accounts 2024
29
STRATEGIC REPORT
Methodologies
The calculations of GHG emissions align
with the UK Government’s ‘Environmental
Reporting
Guidelines:
Including
Streamlined Energy and Carbon Reporting
Guidance’. The GHG reporting period is
aligned to this financial reporting year. The
methodology used to calculate emissions
is
based
on
the
operational
control
approach, as defined in the Greenhouse
Gas Protocol, A Corporate Accounting
and Reporting Standard. In 2024, GHG
Accounting Consolidation Approach was
changed from financial control approach
to operational control approach to include
all GHG emissions we have operational
control over. Previous years’ emissions
were not restated as it was calculated
that there is no material effect from this
change.
We have calculated our emissions using
emission conversion factors published
by the Department for Environment, Food
and Rural Affairs (Defra), the Department
for Business, Energy & Industrial Strategy
(BEIS), the Joint Research Centre (JRC) -
the European Commission's science and
knowledge service, Association of Issuing
Bodies (Residual Mixes) and Exiobase.
Scope 1
Scope 1 emissions cover natural gas
combustion within boilers and road fuel
combustion within leased/rented vehicles
across all Group companies. During 2024,
we reported road fuel combustion from 8
vehicles (2023: 9 vehicles), while the total
number of vehicles decreased to 4 at the
end of the year. The total Scope 1 CO2
equivalent emissions decreased by 8% in
2024, driven by the decrease in the Group’s
fleet.
Scope 2
Scope
2
emissions
cover
purchased
electricity, heat and cooling for own
use across all Group offices located in
Vilnius, Tallinn, Tartu and Riga, as well
as electricity from data centres falling
under Scope 2. In accordance with the UK
Government’s ‘Environmental Reporting
Guidelines: Including Streamlined Energy
and Carbon Reporting Guidance’, location-
based and market-based methods for
purchased
electricity
emissions
were
used. All electricity, heat and cooling
purchased was outside of the UK: in
Lithuania, Latvia, Estonia and Poland.
Total Scope 2 location-based emissions
decreased by 7% in 2024 as a result of an
energy optimisation program carried out
in our Vilnius office and one of our data
centres in Estonia. Total Scope 2 market-
based emissions decreased by 74% in
2024, largely due to our data centre in
Poland switching to 100% electricity from
renewable sources at the end of 2023.
Scope 3
In 2024, we completed our Scope 3
carbon emissions assessment, where we
identified relevant Scope 3 categories,
which are listed in the GHG emissions
table on page 27. We used a combination
of
spend-based,
average-data,
fuel-
based and distance-based methods for
calculating our Scope 3 emissions. We
also applied an Environmentally-Extended
Input-Output database methodology. The
accuracy of our Scope 3 footprint will get
better each year as we revisit and refine
the methodology and underlying dataset.
Intensity ratio
Emissions have also been calculated
using an ‘intensity metric’, which enables
the Group to monitor how well we are
controlling emissions on an annual basis,
independent of fluctuations in the levels of
Group’s activity. In respect of Scope 1 and
2, our use of energy is driven by our people
and therefore we consider ‘Emissions
per employee’ to be the most suitable
metric, based on the average number
of FTEs during the year. The emissions
have also been calculated in relation to
our turnover – ‘Emissions per million
revenue’, which determines cost efficiency
based on comparing carbon emissions to
overall business revenue. The reduction in
absolute emissions helped us to decrease
market-based emissions per employee
to 0.4 tonnes of CO
2
e (2023: 0.8 tonnes
of CO
2
e) and market-based emissions
per million revenue to 0.8 tonnes of CO
2
e
(2023: 1.7 tonnes of CO
2
e).
Electricity consumption
The
total
electricity
consumption
in
2024 was 367.9 MWh (2023 - 363.0
MWh).
In 2024, we had no energy supply
agreements for which we were directly
responsible. However, we continuously
lead a conversation with our service
providers to find possibilities to switch to
more sustainable energy. We are proud to
announce that, in 2024,
the percentage of
renewable energy used in our offices and
data centres increased from 73% to 88%,
while emission-free electricity increased
from 87% to 99% during the year. Also, 80%
of electricity used in our data centres is
from renewable energy (100% is emission-
free) and 98% of electricity used in our
offices is from renewable energy (98% is
emission-free). 100% electricity used was
from the grid.
Energy efficiency
We
are
conscious
of
the
energy
consumption in our offices and thus we try
to make energy consumption as efficient
as possible. During 2024, our Vilnius
office carried out an outsourced energy
optimisation, which involved reviewing
the efficiency of appliances and heating
systems. As a result, energy used in the
Vilnius office was reduced by 8% in 2024,
compared to 2023. In addition to that, one
of our data centres in Estonia changed
server settings to optimise the electricity
usage. As a result, 16% less energy was
used in this data centre in 2024, compared
to 2023.
Environmental targets
Target
Status
Description and progress towards our goals
Scope 1. All company vehicles
to be EV or ultra low emission by
2028
On track
During the year, 4 internal combustion engine vehicle leases and rents came to an end
and were not renewed or replaced, which is in line with our program to give up all high
emission vehicles. As a result, emissions from vehicles in Scope 1 were reduced by
19%.
Scope 2. At least 80% electricity
to be from renewable energy
sources by 2025 and 100% by
2030
On track
We achieved our goal to have at least 80% of used electricity derived from renewable
energy sources by 2025 by increasing the portion of electricity derived from renewable
sources to 88% in 2024, while our emission-free electricity increased to 99%.
98% of electricity used in our offices and 80% of electricity used in our data centres is
from renewable energy.
Reduce our emissions by at least
42% by 2030
Achieved
We succeeded in meeting the Science Based Targets initiative's requirement that we
cut our absolute emissions by 42% from a 2022 base year. Because we are using more
renewable electricity in our offices and data centres, we have reduced the amount
of emissions by 70% compared to the 2022 base year. We will continue to cut our
emissions by increasing the amount of emission-free electricity and moving to EVs.
To be carbon neutral
1
across our
direct operations
Achieved
We offset our Scope 1 and 2 emissions through environmental initiatives.
Net zero
2
by 2050
On track
We are working toward our net zero target and as part of our net zero journey we
reported our Scope 3 carbon emissions for the first time.
We will reach net zero by 2050 by reducing our emissions by at least 90% and
neutralising any residual emissions.
1
Carbon neutrality is achieved by measures that companies take to remove carbon from the atmosphere and permanently store it to counterbalance the impact of emissions that
remain unabated (source: Science Based Targets initiative).
2
Setting corporate net-zero targets aligned with meeting societal climate goals means: (a) reducing Scope 1, 2 and 3 emissions to zero or a residual level consistent with reaching
net-zero emissions at the global or sector level in eligible 1.5°C scenarios or sector pathways and (b) neutralising any residual emissions at the net zero target date – and any GHG
emissions released into the atmosphere thereafter (source: Science Based Targets initiative).
Water
Our total water consumption during 2024
increased to 642 cubic metres due to
a higher number of days of employees
working from the offices (2023 - 471
cubic
metres).
The
water
usage
is
derived from our offices in Vilnius, Tallinn,
Tartu and Riga, where municipal water
supplies provide 100% of the water. No
water is withdrawn from areas with high
water stress. Waste water produced in
the Groups’ premises is treated by the
municipalities.
Waste
In BCG we recycle the waste we generate
in
our
offices,
including
paper
and
plastic. We also seek to minimise the
environmental impact of our business
activities by extensive use of digital
documentation,
including
e-signatures
and e-contracts to reduce paper usage.
BCG companies by nature do not produce
toxic waste, all waste produced is non-
toxic paper, plastic, food and general
waste. The waste is treated by local waste
management companies.
Carbon neutrality
BCG has been carbon neutral across
its direct operations (Scope 1 and 2)
since it has raised a goal to be carbon
neutral in 2022. This year in collaboration
with eAgronom, we offset 55 tCO
2
e to
neutralise our 2024 carbon footprint,
including our Scope 1 and Scope 2 carbon
emissions. To achieve carbon neutrality,
we have funded an eAgronom project,
which involves improving agriculture land
management in Lithuania. The project
helps Lithuanian farmers to transition from
conventional practices into conservation
agriculture practices, such as reducing
soil
disturbance
by
reducing
tilling,
increasing soil cover by implementing or
intensifying the frequency of cover crops,
crop residue management and nitrogen
fertiliser reduction.
Science Based Targets initiative
In 2023, we submitted our near term target
to the Science Based Targets initiative
(SBTi) Business Ambition for 1.5°C, which
was approved in June 2023. The targets
committed us to reduce our absolute
Scope 1 and 2 emissions by at least 42%
by 2030 from a 2022 base year. Because
we are using more renewable electricity
in our offices and data centres, we were
able to exceed the target and reduce our
emissions in direct operations by 70%
from 2022. Our other near term targets
involve making our company fleet ultra-
low emission by 2028 and increasing the
percentage of electricity derived from
renewable sources to 100% by 2030,
which will allow us to further reduce our
emissions.
Sustainability Report
continued
Sustainability Report
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
The picture shows our participation in tree planting organised by the
organisation "Unicorns Lithuania", which BCG joined after becoming
the third official unicorn (a campany that is valued over $1 billion) in
Lithuania (source: Dealroom).
28
Baltic Classifieds Group PLC Annual Report and Accounts 2024
30
People and Culture
We are proud to be acknowledged and ranked as 10th of the
best performers within the FTSE 250 with 50% of women in
leadership positions.
“
Gender diversity
For the Board’s gender figures
see page 54.
Culture and values
Our culture is a big part of our success
story. Our people are our superpower.
Supported by our recent engagement
survey, we know that our employees also
love working with us. We are proud of
the dedication, ambition and motivation
of our employees and we strive to create
an inclusive environment where everyone
can feel listened to and is supported in
contributing to the long-term sustainable
success of the Group.
Diversity and inclusion
We are highly focused on providing a
safe,
happy,
and
supportive
working
environment. For this reason, we do not
tolerate any discrimination related to
gender, age, sexual orientation, social
status, disability, race, ethnicity, religion, or
personal beliefs in our workplace.
The Group is committed to recruiting
employees based only on experience,
competence, qualification, and the right
abilities for the position and seeks to
provide
equal
opportunities
to
work
conditions, including, training, recruitment
and
redundancy,
security,
and
equal
pay. Applications for employment by
people with disabilities are given full
and fair consideration bearing in mind
the respective aptitudes and abilities of
the applicant concerned and our ability
to make reasonable adjustments to the
role and the work environment. In the
event of existing employees becoming
disabled, all reasonable effort is made to
ensure that appropriate training is given
and their employment within the Group
continues. Training, career development
and promotion of a disabled person is, as
far as possible, identical to that of an able
bodied person.
Gender diversity
The Group also believes in the power of
diversity to establish a creative workplace.
The Board is keen to strengthen and
maintain female representation in senior
roles and BCG has been a contributor to the
FTSE Women Leaders Review, an initiative
which aims to increase female leadership
within the FTSE 350. We are proud to be
acknowledged and ranked as 10th of the
best performers within the FTSE 250 with
50% of women in leadership positions as
at 31 October 2023. We are proud to have
a female CFO and can now confirm we
have four females on our Board of nine
directors.
Ethnic diversity
BCG cares about creating a diverse and
inclusive work community. In order to
better understand the ethnic diversity
across our workforce, we conducted our
annual diversity and inclusion survey
which gave us a better understanding of
ethnicity across our workforce.
Given
that
national
minorities
are
recognised in Lithuania, Estonia and Latvia
and the Office for National Statistics states
that Nationality is an aspect of ethnicity,
this is the distribution of our people across
different ethnic groups relevant to the
Baltics. Please see the current ethnicity
distribution of total population in each of
Lithuania, Latvia and Estonia on page
74
in the 2023 Annual Report.
Talent attraction and retention
The competence and commitment of
the Group’s employees are important
factors for the Group’s success. Our
success also depends on the ability to
attract, train, motivate and retain highly
qualified
individuals,
whilst
building
our corporate culture. The Group faces
significant and increasing competition
for qualified personnel, including those
in
information
technology
positions.
The Group has historically offered the
Senior Management and key employees
investment opportunities in the Group in
order to attract and retain highly qualified
individuals, which has led to Senior
Management and key employees holding
shares in BCG. As of 30 April 2024, we
had an average of 8 years of tenure per
employee and an average 13 years of
tenure per Senior Management employee.
Our
values
Work is fun
Less is more
Getting
things done
Entrepreneurship
Marketplace
is our hobby
Trustworthiness
Average Employee Tenure
4
Average tenure per
employee
Average tenure per
Senior Management
employee
8 years
13 years
Employee training and skills
development
To
support
continuous
professional
development,
training
and
skills
development opportunities are available
to all employees. The training our people
receive can be split into mandatory and
non-mandatory
categories.
Mandatory
training covers our compliance essentials
to ensure compliance with our legislative
and regulatory requirements and other
skills necessary for work purposes. Our
non-mandatory training covers a broad
range of learning and development areas,
including technical skills, soft skills and
awareness. Employee training includes
workshops, conference attendance, online
learning, and professional qualifications,
all initiated by the employer.
Our training
statistics does not include on-the-job
training
and
additional
personal
or
professional training employees pursue
on their own.
Employee engagement and
wellbeing
We are continuously looking for ways
to improve internal communications to
ensure our employees stay connected and
feel engaged. Therefore, it is crucial for
us to keep in touch over virtual channels.
Our employees use Skype, Zoom and
Slack
applications
for
our
internal
communications and these have proved
to be great and efficiency improving tools
for people to communicate.
We hold CEO-led virtual updates whenever
we have news for employees to ensure
our people are updated on key business
activities, business performance or any
strategic changes.
new
In order to contribute to our employees'
health and wellbeing, the vast majority
of our employees are awarded with a
healthcare plan scheme for employees’
medical needs. Also, employees in our
biggest offices in Lithuania and Estonia
are given a free yearly gym subscription.
To keep the Board informed on workforce
related issues, the CEO, CFO and COO
provide updates at every Board meeting
which includes relevant workforce updates.
This engagement method is effective
due to the management structure of the
Group. The Board is particularly hands-on,
engaged and committed to ensuring that
it understands the composition and views
of employees. During the year, designated
Non-Executive
Board
members
met
with employees where people could ask
questions or express relevant concerns.
We hold these meetings regularly.
Summary of training provided
2024
Total hours of training
2,488
Hours of mandatory training
945
Hours of non-mandatory training
1,543
Average hours of training per
employee
17
Annual cost of training, €
67,149
Average cost per employee, €
466
Average number of active
employees during the year
144
Sustainability Report
continued
Sustainability Report
continued
1
Calculated on a headcount basis, as at 30 April
2024 (2023: female 51%: male 49%).
2
Executive Committee and Direct Reports to the
Executive Committee, according to the FTSE Women
Leaders Review, as at 30 April 2024 (2023: 45%:55%).
3
Data collected on a headcount basis during the
Employee diversity survey in April 2024.
4
Calculated on a headcount basis, as at 30 April
2024 (2023 average tenure per employee: 8 years,
2023 average tenure per Senior Management
employee: 14 years).
50%
50%
All Employees
1
Male
Female
48%
52%
Leadership
Team
2
Male
Female
Employee engagement survey
In order to get a better understanding of
the current employee morale, satisfaction,
and engagement at BCG, we conduct an
annual employee engagement survey. We
welcome open and honest feedback from
our employees and that is why we conduct
employee surveys on a regular basis.
We are pleased that the 2024 employee
survey showed that, in line with last year's
results, more than 95% of our employees
feel proud to be a part of the BCG team
and would recommend their friends to
work here.
1
Summary results were presented to the
Board and employees. The feedback from
employees enabled Senior Management
to make the necessary conclusions on
the employee morale, satisfaction and
engagement, which will help to make
positive improvement in each of these
areas.
Employee share incentive scheme
We want our employees to benefit directly
from their contribution to the Group’s
success. The Group currently operates
a Performance Share Plan (“PSP”) that
is subject to service and performance
conditions. The PSP scheme consists
of share options for Executive Directors
and certain key employees with a vesting
period of three years. The Group awarded
1,138,024 share options under the PSP
scheme in 2024 (2023: 1,465,911 share
options,
including
special
retention
award for GetaPro employees).
For more information on the
PSP scheme, see note 24 to the
consolidated financial statements on
page 104.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
31
STRATEGIC REPORT
1
Over 95% of respondents answered YES to both questions: “Do you feel proud to be part of the BCG team?” and “Would you recommend your friends to work here?”.
We are pleased that the 2024 employee survey showed
that more than 95% of our employees feel proud to be
a part of the BCG team and would recommend their
friends to work here.
“
Ethnic diversity
3
Lithuanian 60%
Estonian 26%
Latvian 7%
Jewish 7%
Senior
Management
Lithuanian 56%
Estonian 29%
Latvian 6%
Russian 3%
Polish 2%
Other 3%
Not disclosed 1%
All Employees
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
32
33
STRATEGIC REPORT
Fair pay
Since we are operating in a highly
competitive labour market segment, it is
crucial to us that our employees receive
a competitive salary for the work they
perform. All employees receive fair pay
according to their qualification, level of
responsibility, work results, experience,
and other objective criteria. To make
sure the salaries of our employees stay
competitive, they are reviewed yearly,
taking into account market data, the skill
set and experience of employees. The
salaries on average increased by 11%
during 2024 and 13% during 2023.
As opposed to the UK, the Baltics lack
a generally recognised real living wage
standard. However, all our employees
are paid significantly above the national
minimum wage and we are committed to
paying a fair salary for all our employees.
For more information on director and
employee remuneration, see pages 61
to 65.
Health and safety
The health and safety of all employees
and visitors is a priority for the business.
Our principal objective is to prevent or
minimise accidents, injury and ill health to
staff working at our premises or remotely.
This includes contractors, and others, who
work at, or visit our premises.
There were no fatalities, serious injuries
or safety accidents reported during the
year, and there was no lost time due to
work-related
incidents
or
work-related
occupational disease.
All our employees have fire safety training
at least every 1 to 2 years in line with the
national requirements across our offices in
Lithuania, Latvia and Estonia. All our new
employees are trained in safety once they
join the BCG team. Also, we provide our
employees with a health check-up every 2
to 3 years, depending on the location and
national requirements.
Since the beginning
of the war in Ukraine
the Group has donated
€0.4 million to support
the struggle of
Ukrainians.
“
Social and community issues
BCG engages with local communities,
and supports them on an ongoing basis,
through
local
connections,
charitable
work and support. During 2024, the focus
continued to be on both organisations that
support Ukraine, to which we donated €0.1
million, and local initiatives, to which we
also donated €0.1 million.
Since the beginning of the war in Ukraine,
the Group has donated €0.4 million
to support the struggle of Ukrainians
through various charity organisations.
€0.2 million
has been donated to a local
non-government
organisation
“Blue
/
Yellow” which provides nonlethal supplies
to Ukraine and
€0.1 million has been
1
Free placement of ads for
professional services offered by
Ukrainians in Paslaugos.lt
Helps Ukrainians to find clients in
Lithuania and earn money for the
services provided
Label "Help for Ukrainians" in Aruodas.lt
Allows customers to advertise that
they offer more flexible conditions to
refugees and enables Ukrainians to find
the advertisements they need more
easily
Label "Ukrainians are welcome" in
CVbankas.lt
Help Ukrainian refugees find jobs, which
are the most suitable for them
Category "For Ukraine" in Skelbiu.lt
People can list clothes, furniture,
appliances or any other items free of
charge to give away for free
2
Rental agreements in Aruodas.lt
Translated into English, Ukrainian and
Russian languages
3
CVbankas.lt in Ukrainian
Visitors may view the portal’s content,
including job advertisement information
in Ukrainian language. Applicants'
resumes can also be created in Ukrainian
language
3
2
1
Sustainability Report
continued
Sustainability Report continued
Average Salary Increase
2023
2024
13%
11%
donated to the Red Cross. An additional
€0.1 million has been donated to other
initiatives that help civilians who are
forced to leave their homeland and flee
from the war zone.
In addition to these donations, we try to
ease the challenges faced by Ukrainian
refugees and the people of Ukraine in
any other ways that we can, especially
because since the start of the war, tens
of thousands of Ukrainian refugees have
become part of our local communities in
the Baltics. Some of the developments
done in order to ease the challenges faced
by Ukrainian refugees include:
Access and affordability
On average each resident in the Baltics
visited BCG sites 10 times per month
during 2024, making BCG the leading
online classifieds group in the Baltics. It is
important for us to ensure that the most
disadvantaged members of our society
can access affordable services on our site
in a convenient and free way.
Currently,
the
Group’s
portals
offer
consumers free access to search for
a wide range of products and services
listed
by
B2C
and
C2C
advertisers,
portal-specific ancillary services, such as
financial intermediation and data services
(for example salary data per different job
category on the Jobs portal). Consumers
can search the portal with or without prior
registration and have access to a large
Mental health
We are committed to supporting our
employees in all aspects of their health
and wellbeing, including mental health.
Every year we have regular team building
events, the purpose of which is to get
to know colleagues and thereby create
a
pleasant
working
environment
in
the
offices.
Managers
have
regular
performance
reviews
with
employees,
which also include discussing if the
employee
is
feeling
satisfied
and
motivated in the organisation. We also
organise
knowledge
sharing
sessions
and seminars for employees on personal
wellbeing, including on demand training
related to employees’ mental health.
Workplace flexibility and work-life
balance
Currently we apply a hybrid working model,
mixing in-office and remote work. We also
provide a flexi-time working system with
a set number of hours with the starting
and finishing times chosen within agreed
limits by the employee.
volume of listings across the portals in
numerous categories including real estate,
automotive, jobs (blue and white collar),
home furnishing, clothing, construction
materials,
agricultural
equipment
and
pets.
Our Generalist platforms allow private
users to list general items for sale entirely
for free. Applying for a job on our Jobs
platform is also free of charge. Our vertical
platforms offer private users ad listing fees
that relate to the value of the item listed
- as a result, people who list lower value
items, can list them for a significantly
lower price. Searching for an employee on
our job portal varies by location, so it costs
less in smaller cities where the average
salary is lower.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
34
35
STRATEGIC REPORT
Social targets
Target
Status
Description and progress towards our goals
Maintain average employee tenure above 5 years
Achieved
In 2024 the average employee tenure was maintained at 8 years.
Maintain employee engagement above 90%
Achieved
In 2024 we conducted our annual employee engagement survey
which showed that in line with last year's results, more than 95% of
employees are proud to work at BCG.
Maintain at least 40% women in the
whole workforce
Achieved
We maintained our gender diversity in the whole workforce with 50%
of the workforce being women.
Maintain at least 40% of women in our
Leadership Team*
Achieved
We increased the representation of women in our Leadership Team
from 45% to 52%.
*Executive Committee and Direct Reports to the Executive Committee, according to the FTSE Women Leaders Review, as at 30 April 2024.
During 2024, we were proud to donate, among others, to the following charities:
Blue / Yellow
Provides Ukrainian soldiers and volunteers with essential supplies
that help them battle Russian aggression
Tryzub
Collects donations to purchase SUVs and ambulances, which are
then stocked with medical supplies, drones, and other necessities.
These vehicles are directly delivered to the Ukrainian army to aid
their efforts
Renkuosi mokyti
Recruits and trains passionate people to become teachers over a
two year period. These teachers are committed to ensuring every
child in their school gets the support they need to succeed
4 Percent
Initiative of the civil society that seeks to urge Lithuanian politicians
to agree on the allocation of 4% of GDP to Lithuania’s defence
Unicorns Lithuania
Support for the free IT exam organised by the esteemed Lithuanian
startup organisation "Unicorns Lithuania"
Jaunimo linija
One of the largest charities providing free emotional support by
telephone and internet in Lithuania
Myliu mišką
Non-profit organisation dedicated to bolstering Lithuania's forested
landscapes by combatting CO
2
emissions
Vilnius University Students' Representation
Support for the Vilnius University event, which aims to connect
students with their future employers
new
new
new
In 2024 Osta.ee hosted the largest
private initiative charity auction in
Estonia, where nearly 600 dresses
and ties were collected from both public
figures and private individuals for auction.
Money was collected for the Estonian
Cancer Society for the purchase of a
mobile computed tomography scanner
for the early diagnosis of cancer and
examination of acute illness and major
trauma. Osta.ee provided the platform free
of charge, and the Osta team contributed
their free time to ensure the auctions ran
smoothly on the platform. More than €46
thousand were raised. In March 2024 the
mobile computed tomography scanner
was acquired and will start operating in the
remote areas of Estonia, offering critically
important medical support in regions
where hospitals lack such equipment.
Governance and Compliance
The Board takes responsibility for all
workforce policies and practices which
are consistent with the Company values
and supports its long-term sustainable
success.
The Board reviews and approves all
significant
policies
that
impact
our
workforce. The Executive Directors take
direct responsibility for all workforce
related issues to ensure that they align
with the Group’s values and purpose.
Policies are published on the Company
intranet. Our employees are required to
confirm their understanding of these
policies
upon
recruitment
and
on
a
periodic basis. Where relevant, training is
given to the workforce.
As a leading group of digital marketplaces
in the Baltics, we are committed to
putting data security, as well customer
and consumer privacy at the heart of
what we do. It is our highest priority to
provide reliable, efficient and fair digital
platforms. Cyber security and privacy is
also included into the Board’s schedule.
The Senior Management briefs the board
on information security matters at least
once a year.
Data security
In order to ensure our portals are secure,
we have implemented technical measures,
including
distributed
denial-of-service
(DDoS) protection, bot management and
strict firewall rules. All critical parts of
the infrastructure are secured from the
public and our software is up-to-date
with critical security patches applied. We
conduct penetration testing and content
moderation
to
ensure
security
and
mitigation of cyber crime risk.
Security
incidents
are
detected
via
security tools such as Cloudflare WAF and
internal monitoring systems. Additionally,
we implement public media monitoring
and react to feedback from customers to
ensure we are proactive in dealing with
cyber threats.
Data privacy
We are committed to ensuring that the
personal information we collect and use
is appropriate for the purpose and does
not constitute an invasion of privacy.
When processing personal data, we strive
to keep it accurate, secure, confidential,
properly stored and protected. Also, we
make every effort to minimise the amount
of personal data transferred before data is
transferred.
We have adopted the EU GDPR and
UK Data Protection Act 2018 as our
benchmarks for data protection. Where
required, users have to consent with our
Terms of Use, Privacy Policy and Cookies
consent management platform.
Each of our portals has a public Privacy
Policy uploaded on their website with clear
terms involving the collection, use, sharing
and retention of user data including data
transferred to third parties. All portals are
committed to notify data subjects in a
timely manner in case of policy changes
or data breach. We require all third parties
with whom the data is shared to comply
with the company’s privacy standards.
To protect the personal data of the private
sellers who advertise on our platforms we
hide part of their contact data and provide
virtual
numbers.
Also,
we
constantly
improve our data privacy practices and
during 2024 all BCG portals carried out
optimisation for personal data deletion
processes.
In addition, all of our employees have
been trained for GDPR. As planned, we did
GDPR training for all our offices in 2024.
We are looking at data privacy with great
scrutiny and will run this training every 2
years.
During 2024, our outsourced internal
auditors
finalised
the
comprehensive
GDPR assessment across the companies
of the Group and reached the conclusion
that the Group implemented sufficient
technical and organisational measures
(including policies and procedures) for
the protection of personal data to address
the requirements of the GDPR. For more
information on our Internal audit, see
Audit Committee Report on page 58.
Human rights
BCG is committed to acting in an ethical
manner with integrity and transparency
in all business dealings and to investing
in the creation of effective systems and
controls across the Group to safeguard
against adverse human rights impacts.
BCG’s policy is to engage only with
suppliers who meet our ethical standards.
Potential suppliers are assessed based
on their geographical location, nature of
services provided and their reputation.
In
2024
BCG
adopted
the
Business
Partner Code of Conduct which includes
the main principles of human rights that
our
business
partners
must
respect.
We safeguard our employees through a
framework of policies and statements
including
Code
of
Conduct,
Modern
Slavery and Whistle-Blowing policies.
Modern slavery
We are committed to addressing the
potential risks of modern slavery, human
trafficking and other human rights abuses
within the Group and in its supply chain
and we will take steps to review and,
where appropriate, further improve our
processes to ensure that we mitigate
these risks appropriately. Should any
instances of modern slavery be identified,
we believe the Group is well positioned to
deal with and address these.
Anti-bribery and anti-corruption
The Group has adopted an Anti-Bribery
and Anti-Corruption Policy which outlines
main rules and principles that ensure a
consistent standard of behaviour across
the
Group.
All
Board
members
and
employees, including Senior Management,
are trained to identify and avoid the risks
related to corruption and bribery.
The Company is committed to taking
a
proportionate
and
risk-based
approach to due diligence of its third-
party intermediaries. Where third-party
intermediaries are engaged, an effective
risk assessment informs the procedures to
be imposed to mitigate the risk of bribery
by any such third-party intermediary. BCG
assesses the reputation and standing of
the firm or individual it is employing and
the historical issues that have arisen in
the relevant industry sector or region of
employment.
As per our Gifts and Entertainment Policy,
BCG does not tolerate any inappropriate
attempts to influence or reward someone
in
connection
with
any
business
decision or transaction through gifts or
entertainment. Pre-approval is mandatory
for gifts or entertainment provided to or
received in excess of €750. Disclosure
and documentation is mandatory for any
gifts or entertainment employees provide
or receive that exceed €250 per employee
per annum.
There were no political donations made
during the financial year (€nil in previous
financial year).
Whistle-blowing
BCG has adopted a Group-wide Whistle-
Blowing Policy designed to provide our
employees with an effective and available
mechanism to help prevent malpractice
occurring across our working environment,
which includes a way for employees to
raise their concerns anonymously.
Employees can express a problem via
a local inbox set up in the office, their
manager, the Executive Team, or the
General Counsel if they have any. An
employee can get in touch with the Chair
of the Audit Committee if they want to
talk to someone outside of BCG.
All BCG
employees have access to all contact
details and information on the whistle-
blowing procedure.
Every effort will be made to keep the
identity of an individual who makes a
disclosure under this Policy confidential.
No employee who raises concerns under
this
procedure
will
be
dismissed
or
subjected to any detriment as a result of
such action. Employees who victimise or
retaliate against those who have raised
concerns under this Policy will be subject
to disciplinary action.
The CFO of Baltic Classifieds Group has
Board responsibility for monitoring and
evaluating whistle-blowing arrangements.
Sustainability Report
continued
Sustainability Report
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
36
37
STRATEGIC REPORT
Governance targets
Target
Status
Description and progress towards our targets
Complying with tax, data protection, human rights,
bribery, corruption and other related rules and
regulations in the countries the Group operates
Achieved
During 2024, BCG complied with all tax, data protection, human
rights, bribery, corruption and other related rules and regulations
in the countries the Group operates.
The CFO will update the Audit Committee
as and when whistle-blowing concerns
have been received, the investigations
completed and any actions arising as a
result. From time to time, the CFO will
also review the organisation’s whistle-
blowing arrangements and ensure they
are subject to independent retrospective
review. There were no whistle-blowing
reports made during the financial year. The
implementation and effectiveness of the
Group’s compliance function and policies
is reviewed periodically by the Audit
Committee and is supported by periodic
reviews and risk assessments performed
by the Group’s finance and legal teams.
Competitive behaviour
BCG
competes
in
highly
competitive
markets with low entry barriers. Due to
rapid
technological
change,
evolving
industry standards and changing needs
and preferences of customers and users,
the competitive landscape is extremely
dynamic. Our portals face competition
from both traditional and new online
classified
portals
such
as
Facebook
Marketplace and Linkedin.
We put a strong focus on compliance with
competition laws. Our approach involves
monitoring our pricing strategies to ensure
that the planned pricing is fair and reflects
the economic value of the product offered,
maintaining transparency in our dealing
to ensure the access to our platforms,
and refrain from exclusive dealings that
could unfairly hinder the competition. Our
pricing strategies had been challenged by
the third parties and National Competition
Authorities
in
Lithuania
and
Estonia
adopted positive decisions verifying that
the prices were fair compared to selected
benchmarks. It gives the credibility to
assess the pricing limits and the legality
of the planned actions.
Tax transparency
BCG is committed to paying its fair share
of tax in a transparent manner. The Group’s
effective tax rate for 2024 was 8% (2023:
12%) with income tax of €2.9m (2023:
€3.2m). For more information on our total
tax contribution, see Financial Review on
page 18.
Non-Financial and Sustainability Information Statement
The following table sets out where Stakeholders can find relevant non-financial information within this Annual Report, further to the
Financial Reporting Directive requirements contained in Sections 414CA and 414CB of the Companies Act 2006. Where possible, it also
states where additional information can be found that supports these requirements
Sustainability Accounting Standards Board (SASB)
Disclosure Topics & Accounting Metrics
SASB standards enable businesses around the world to identify, manage and communicate financially material sustainability information
to their investors. The SASB standards are industry specific and identify the minimum set of financially material sustainability topics and
their associated metrics for the typical company in an industry. SASB assigns BCG to the Internet & Media Services sector and the following
disclosure sets out our progress according to the SASB standard for that sector.
The table below summarises the recommended SASB disclosures. Where we have provided the information, the location in the Annual
Report is indicated below.
Accounting metric
Location
Environmental footprint of hardware infrastructure
• Total energy consumed
• Percentage grid electricity
• Percentage renewable
• Total water consumed
•
Discussion of the integration of environmental
considerations into strategic planning for data centre
needs
Total energy consumed, percentage grid electricity and percentage
renewable are disclosed in the TCFD Report on pages 27 to 28.
Water usage disclosed in TCFD Report on page 29.
We have raised a goal to move to 100% renewable electricity by 2030
including our data centres. Please see the TCFD Report on page 29.
Data privacy, advertising standards and freedom of expression
•
Description of policies and practices relating to
behavioural advertising and user privacy
•
Total amount of monetary losses as a result of legal
proceedings associated with user privacy
Information on data security and data privacy can be found
on page 35 of
the Sustainability Report .
In 2024 we had no monetary losses as a result of legal proceedings
associated with user privacy.
Data security
•
Number of data breaches
•
Description of approach to identifying and addressing
data security risks
We report qualifying incidents to the relevant national regulators and
impacted individuals, where we are legally required to do so and within the
mandated timeframes. If regulators find any faults with our data breach
management or data security practices, sanctions may be imposed. No
such sanctions were imposed in 2024.
More information on data breaches can be found on page 49 in the
Corporate Governance Report.
Information on data security can be found in the Sustainability Report on
page 35 and Principal risks and uncertainties section on page 39.
Employee recruitment, inclusion and performance
•
Employee engagement as a percentage
•
Gender and ethnic group representation
Information on employee engagement, gender diversity and ethnicity can
be found in the Sustainability Report on pages 30 to 31.
Intellectual property protection and competitive behaviour
•
Total amount of monetary losses as a result of
legal proceedings associated with anti competitive
behaviour regulations
In 2024 we had no monetary losses as a result of legal proceedings
associated with anti competitive behaviour regulations.
Reporting topic
Policies and standards which govern our approach
Annual Report and Accounts section reference
Page
Environmental matters, including
the impact of the business on the
environment and climate related
disclosures
Code of Conduct
Business Partner Code of Conduct
Sustainability Report
TCFD Report
Principal risks and uncertainties
Engagement with our Stakeholders
22
24
38
47
Employees
Whistle-Blowing Policy
Disciplinary Rules and Procedures Policy
Code of Conduct
Confidential Information Policy
AI Policy
Sustainability Report
Engagement with our Stakeholders
Directors’ Remuneration Report
22
47
60
Social and community matters
Modern Slavery Statement
Board Diversity Policy
Sustainability Report
Engagement with our Stakeholders
22
47
Respect for human rights
Modern Slavery Statement
Privacy Policy
Document Retention Policy
GDPR Policy
Code of Conduct
Business Partner Code of Conduct
Sustainability Report
Engagement with our Stakeholders
22
47
Anti-bribery and corruption
Anti-Bribery and Corruption Policy
Gifts and Entertainment Policy
Sustainability Report
Board Leadership and Company Purpose
Audit Committee Report
22
46
56
Business model
N/A
Our Business at a Glance
10
Principal risks and uncertainties
Risk Register
Disaster Recovery Policy
Principal risks and uncertainties
38
Non-financial KPIs
Strategic Highlights
Our Business at a Glance
Sustainability Report
2
10
22
Sustainability Report
continued
Sustainability Report
continued
new
new
new
Risk Management
Risk management framework
The Company does not have a separate
risk committee and the Board has overall
responsibility for determining the nature
and extent of the principal risks it is willing
to take and for ensuring that risks are
effectively managed across the Group.
The Group operates a cautious attitude to
risk and its risk appetite is low.
The Board performs a robust review and
assessment of the risks, and considers
potential emerging risks. Risks are then
assessed based on their likelihood and
potential impact with the combination
of the two measures defining the overall
score of each risk so they can be rated.
Principal risks and uncertainties
The
Board
has
carried
out
a
robust
assessment of the emerging and principal
risks facing the Group. This included an
assessment of the likelihood and impact
of each risk identified, and the mitigating
actions being taken. The principal risks
and uncertainties identified, along with the
potential impact and key mitigations, are
detailed in this section. We recognise that
the Group is exposed to risks wider than
those listed, however we have disclosed
those that we believe are likely to have the
greatest impact on the Group’s performance
and those that have been the subject of
discussion at Board meetings this year.
Laws & regulations
Description & impact
The Group is subject to competition and antitrust
laws, which may limit the market power, pricing
or other actions of any firm within the Group.
Companies can be subject to legal action,
investigations and proceedings by national
and supranational competition and antitrust
authorities, as well as claims from clients and
business partners for alleged infringements of
competition and antitrust laws. These actions
could result in fines, other forms of liability
or
damage
to
the
companies'
reputation.
Additionally, such laws and regulations could
limit or prohibit the ability to grow in certain
markets.
Future acquisitions by the Group could be
affected by applicable antitrust laws and may
be unsuccessful if the required approvals from
competition authorities are not obtained.
Mitigation
•
Having a dedicated internal expertise within
the business, responsible for identifying,
assessing and responding to upcoming
changes in laws and regulations, and the use
of external specialists where necessary
Developments in 2024
In April 2024, Estonian Competition Authority
terminated
excessive
pricing
investigations
against the Group’s Real Estate and Automotive
portals in Estonia.
The Group has one remaining supervisory
proceeding ongoing at Estonian Competition
Authority regarding the failure to supply. Since
2022 autumn there are no updates nor actions
in this proceeding.
The proceeding cannot lead to imposition
of fines to any Group company, however, a
precept ordering the Group companies to end
any ongoing infringements could be imposed
or the Estonian Competition Authority could
potentially initiate misdemeanour proceedings
that would entitle the imposition of a fine of up
to €400 thousand per case. See note 25 to the
consolidated financial statements for further
detail.
In February 2024 the Estonian Parliament
initiated the legislative process to adopt the
new draft law of the Law on Competition
implementing the ECN+ Directive ((EU) 2019/1).
The draft law is subject to further discussions
in the Parliament, but it is strongly likely that
the current law will be amended, and it might be
relevant for the proceedings against the Group
company.
If proceedings against Allepal are
still ongoing on the date of the act taking force,
the Competition Authority could have the power
to impose a fine of 10% of the whole Group's
turnover under the new law.
Acquisition risk
Description & impact
The
Group
might
make
an
unsuccessful
acquisition or face challenges in integrating an
acquisition, which could lead to reduced profits
and impairment charge.
Mitigation
•
Acquisitions are focused on businesses,
operating in sectors where the Group has or
can develop a competitive advantage and
that offer good growth opportunities
•
Conducting
detailed
pre-acquisition
due
diligence by in-house personnel and external
advisers
•
Retaining and motivating key personnel
Developments in 2024
The Services business acquired in 2022 has
reached break-even this year.
Whilst there have been no acquisitions made
recently, the Board regularly considers potential
opportunities.
Technology
Description & impact
Cyber-attacks.
The Group is at greater risk
from cyber threats due to its large scale
and prominence.
As the business is entirely
dependent on information technology to provide
its
services,
successful
attacks
have
the
potential to directly impact revenue.
Major data breach.
A cyber-attack or internal
failure, resulting in disabling of platforms or
systems, or a major data breach, could adversely
impact the Group’s reputation, erode trust and
lead to a loss of revenue and / or profits. Data
breaches, a common form of cyber-attack, can
have a significant negative business impact and
often arise from insufficiently protected data.
Disruption
to
availability
of
services.
The
availability and reliability of services for the
Group’s customers are of paramount importance.
Any downtime or disruption to consumer or
advertiser services can adversely impact the
business through customer complaints, credits,
decreased
consumer
usage,
and
potential
reputational damage.
Therefore,
the
availability
of
third-party
services, such as internet provision and mobile
communication, which are essential for using
the Group’s services, is also crucial.
Mitigation
•
Ongoing investment in security systems to
ensure our systems remain robust
•
Continuous monitoring of external threats
•
Regular testing of the security of IT systems
and platforms, including penetration testing
•
Disaster recovery plan is in place and is
reviewed and tested regularly
•
Internal audit reviews
Developments in 2024
Having in mind the Geopolitical risk, the risk
trend of cyber-attacks is considered to be
increasing.
During the year, an internal audit has reviewed
the Group’s disaster recovery plan.
The
Group
continued
to
strengthen
its
systems and processes following a
cyber
security assessment performed by the Group’s
outsourced internal audit last year, along with
increasing awareness of both cyber security and
data protection across the Group.
Geopolitical risk
Description & impact
Further escalation of the war in Ukraine could
result in the unrest and instability in the Baltic
countries,
potentially
impacting
consumer
behaviour (e.g. reducing spending or investing),
seller activity (e.g. disrupting retail), and investor
perception of the business.
Mitigation
•
Maintaining a flexible cost base that can
respond to changing conditions
•
Maintaining a flexible capital allocation
policy, with limited debt
Developments in 2024
Despite concerns over increased geopolitical
tensions,
the
Group’s
portals
experienced
sustained growth throughout the year.
This
resilience underscores both the strength of
our Company and the Baltic economies amidst
heightened geopolitical uncertainties in the
region.
Competition
Description & impact
The Group may face new competition in existing
markets or in new areas of activity. Additionally,
changes in technology or consumer behaviour
can influence how people search for cars, real
estate, jobs or general products, potentially
leading to a loss of consumer audience. There
is also a risk of new entrants with innovative
business models, such as offering services for
free, impacting the Group’s audience, content
and
revenue.
Furthermore,
as
the
Group
diversifies into new and adjacent markets, the
competitive landscape widens.
Mitigation
•
Investment into customer experience
•
Development of cross-linkages between
Group's horizontal and vertical platforms
•
Development of
our offering to provide
value-for-money and differentiated services
to advertisers
Developments in 2024
During
2024,
the
Group’s
leading
portals
maintained very strong leadership positions.
The number of advertisers increased year on
year across all business areas.
Political and
macroeconomic situation
Description & impact
Economic conditions (whether due to economic
cycle or supply chain disruption) could lead to a
retraction in the underlying markets, a reduction
in stock, consumer wallets and a reduction
in advertisers budgets or appetite to spend,
which all have the potential to reduce revenue.
Economic conditions can also impact the cost
pressures (such as wage growth, price inflation,
interest rates, etc.).
Mitigation
•
Maintaining a flexible cost base that can
respond to changing conditions
•
Maintaining a flexible capital allocation
policy, with limited debt
Developments in 2024
After a year of high inflation in 2023, consumer
prices have stabilised during the year. The
speed of sale in the underlying markets has
slowed down, which has a positive impact on
the Group’s performance due to an increase of
active advertisements on our portals.
Disruption to our customer
and / or supplier operations
Description & impact
Disruptions to the operations of the Group’s
customers and suppliers in their day-to-day
business may affect the Group's ability to
achieve desired results.
Mitigation
•
Maintaining market leadership in our main
verticals while offering value-added products
and packages
•
Continuous improvements to our platforms
•
Enhancing our product offerings to continue
meeting our customers’ needs and adapting
to evolving business models
•
Maintaining a healthy liquidity headroom
with an unused revolving credit facility of
€10 million as at 30 April 2024, along with
significant headroom against debt covenant
•
Maintaining diversified revenue streams
•
Working with well established and reliable
third parties
•
Having incident management process
Developments in 2024
The Group continued to strengthen its offering
during the year, including an upgrade and
expansion of car history reports and the launch
of
property
rental
services,
which
further
diversified our customer base.
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
38
39
STRATEGIC REPORT
Key:
Stable risk trend
Decreasing risk trend
Increasing risk trend
Climate change
Description & impact
From a long-term perspective, the Group is
subject to physical climate risks, directly related
to climate change, and transitional climate risks,
which may arise due to transitioning to a lower-
carbon economy. Increased severity of extreme
weather events due to accelerating global
warming may result in disruption to provision of
services from our service providers, affect the
availability of websites and change commercial
customers’ behaviour.
New regulations relating to the reduction of
carbon emissions and increasing climate change
awareness may affect the Group’s operations
and the volume of listings and encourage us to
adapt our business to the new regulations and
changing market tendencies.
Mitigation
•
The Group is committed to contributing
to the climate change cause by being
environmentally responsible, reducing carbon
emissions, shifting to renewable energy and
offsetting carbon emissions
•
We are taking actions to adapt to the
increasing climate change awareness and
are ready to adapt if new environmental
regulations arise: adopt the platforms for
eco-friendly products, introduce necessary
filters, educate visitors, enrich ad data with
environmental impact related information
Developments in 2024
In 2024, we completed our Scope 3 carbon
emissions assessment, reduced our total Scope
1 and 2 carbon emissions by 46% and achieved
our goal to have at least 80% of used electricity
derived from renewable energy sources ahead of
the target date of 2025 by increasing the portion
of electricity derived from renewable sources
from 73% to 88%.
Risk Management
continued
Risks are all captured and documented in a
Risk Register, identifying the risk category,
the likelihood of the risk occurring, the
impact if it does occur, a specific owner for
each risk, the risk trend and the mitigation
plan for each risk. The CFO is ultimately
responsible for maintaining this register,
with inputs from the CEO and the COO. The
register forms the basis for monitoring
risks and ongoing risk discussions within
the Board. The Board reviewed the Risk
Register in December 2023 and March
2024.
The Company’s internal control framework
is based on a three lines of defence
model. The first line of defence comprises
operational
management,
which
is
responsible for the direct management of
risk. This includes ensuring appropriate
mitigating controls are in place and
that they are operating effectively. The
second line of defence is made up of
the Company’s internal compliance and
oversight functions such as company
secretarial, finance and legal. The third
line of defence includes internal auditors’
reporting to the Audit Committee.
Emerging and principal risks
Emerging risks are defined by the Group
as potential but not actual future risks
that are often difficult to quantify but may
materially affect the Group.
An explanation of how the Company
manages financial risks is also provided
in note 21 to the consolidated financial
statements.
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
41
Baltic Classifieds Group PLC Annual Report and Accounts 2024
40
Viability Statement
Based on the going concern assessment
discussed in note 2 of the financial
statements,
the
Directors
have
a
reasonable expectation that the Group
has adequate resources to continue in
operational existence for the 12 months
from the date of approval of the financial
statements. For this reason, we continue
to adopt the going concern basis in
preparing the financial statements.
As
required
by
the
UK
Corporate
Governance
Code
2018
(the
“Code”),
the Directors have assessed the long-
term viability of the Group over a period
significantly longer than 12 months from
the approval of these financial statements.
The Directors have assessed the Group’s
prospects considering its current financial
position, its recent historical financial
performance
and
the
principal
and
emerging risks and uncertainties on pages
38 to 39.
The Directors have determined that a
period of five years to April 2029 allows
consideration of the longer-term viability
of the Group and reflects reasonable
expectations in terms of the reliability and
accuracy of operational forecasts. This
process includes an annual review of the
ongoing plan, led by the Group Executive
directors in conjunction with the Group
portal managers. The latest updates to
the plan were finalised in May 2024. The
base case financial projections start with
the Group’s 2025 budget and look ahead
over the assessment period to include
an expected level of growth. The Group’s
funding position is also considered, with
focus on the ongoing compliance with
the covenants attached to the Group’s
external debt.
The strategic plan has been subject to
robust downside stress testing which
involved flexing several main assumptions
underlying the plan to assess the impact
of
severe
but
plausible
scenarios.
Analysis was performed to evaluate the
potential financial impact over the period
of the Group’s principal risks occurring,
including:
•
the impact of any major data breach as
a result of a cyber-attack;
•
adverse changes to the business
environment including due to
competition or disruption to our
customer and / or supplier operations;
and
•
a continuing geopolitical tension in the
neighbouring countries.
Specific
scenarios
that
have
been
modelled include downside scenarios in
relation to:
•
growth of revenues: either limited or
flat growth rate; and
•
effect on operating costs: data breach
related fines, increased marketing
costs.
A
plausible
combination
of
these
scenarios was also assessed.
The objective of the scenario modelling
was to project cash flows generated by the
Group to ensure the Group remains cash
positive during the assessment period
and to project a total leverage ratio to
make sure a healthy covenant headroom
is maintained during this period. It was
taken into account that the Group’s term
loan of €50 million is due in July 2026 and
the Group has access to a revolving credit
facility that amounts to €10 million which
is available until July 2026. Even after
repayment of external debt in all scenarios
tested, the Group remained cash positive
and with a significant covenant headroom
over the five-year period.
Other factors providing comfort to the
Directors about the Group’s long-term
viability in the face of adverse economic
conditions include that the Group has
high
margins,
significant
free
cash
flow generation and an ability to adjust
the discretionary dividend to enhance
liquidity. Therefore the Directors have a
reasonable expectation that the Group
will be able to continue in operation and
meet its liabilities as they fall due over the
period of the assessment.
The Company’s Strategic report, set out on
pages 2 to 40, was approved by the Board
on 2 July 2024 and signed on its behalf by:
Justinas Šimkus
Chief Executive Officer
2 July 2024
Corporate Governance Report
The success of any business is undisputedly linked to
its people and culture. At our Company, we take pride
in our motto, "we love transactions," and it's evident
across our Group.
Trevor Mather
Chair
“
Letter from the Chair of the Board Trevor Mather
Dear Shareholder
On behalf of the Board, I am pleased to
present the Group’s Corporate Governance
Report.
This
Corporate
Governance
Report
explains the key features of the Group’s
governance
framework
and
how
it
complies with the Financial Reporting
Council’s UK Corporate Governance Code
2018 (the “Code”).
The
success
of
any
business
is
undisputedly linked to its people and
culture. At our Company, we take pride
in our motto, "we love transactions," and
it's evident across our Group. Since our
listing on the London Stock Exchange, our
Board has been committed to raising the
standards of our governance framework
and ensuring that our Company Purpose
is at the heart of all decision making. We
recognize that good governance is not
static, but allows our Group to grow and
develop.
Strategy and Stakeholder
engagement
The long-term sustainable success of our
business is inextricably linked to how well
we know and understand our Stakeholders.
The Board held its annual strategy day
during the year. The main objective this
year was to meet with customers from
across the business areas, capture their
views and what is important to them
and consider that in light of the Group’s
strategy. The Board met with 3 customers
from each Auto, Real Estate and Jobs
business
areas
and
discussed
how
the different businesses operate, what
opportunities and issues they are facing,
what impact the current economic climate
is having on them, listened to their views
about BCG’s products and services and
captured any suggested improvements.
During the year I was delighted to join
the executive directors on their Investor
roadshow
in
the
UK
and
received
detailed feedback from their first ever
North America roadshow. It was a truly
invaluable experience for me to meet
our Stakeholders in person and to build
upon the relationships that are already
established with the executives.
Board governance
We are pleased to report that shortly
after the year end, on 11 June 2024, the
Board approved the appointment of a new
Independent Non-Executive Director. Rūta
Armonė brings extensive legal, regulatory,
governance and M&A experience to BCG.
With her appointment, the Board meets
the minimum target as set out in Listing
Rule 9.8.6 of having at least 40% of the
Board being women.
The Group will continue to add to the Board
over the next years, and will continue to
place diversity and inclusion as a key
criteria for the appointment, however,
as we have previously stipulated, we
believe that diversity is to be considered
quite differently for BCG compared to
many other FTSE companies due to all
operations being in the Baltic region.
In accordance with good governance
practice, we undertook an internal board
performance review during the year to
ensure that the Board and its Committees
perform effectively. For more on this see
page 55.
Future outlook
The Board recognises the importance of a
strong governance framework to drive the
long-term success of our business. We are
committed to establishing our policies and
practices to ensure that our governance
evolves
alongside
our
business.
To
achieve this, we review and monitor our
governance practices annually.
2024 Annual General Meeting
Our 2024 Annual General Meeting (“AGM”)
will be held at 11:00 am local time on
27 September 2024 at G.D. Kuverto g.
15, Neringa, LT-93123, Lithuania. Myself
and other Directors will join the meeting
either in person or via teleconference. We
strongly encourage all Shareholders to
cast their votes by proxy, and to send any
questions in respect of AGM business to
cosec@balticclassifieds.com.
Trevor Mather
Chair
2 July 2024
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
42
43
Board of Directors
The Directors have skills and experience relevant to the sector in which the Group operates in order to effectively set the strategic
direction and purpose of the Group.
Senior Management
In addition to the three Executive Directors, the Senior Management is made up of the following individuals:
The matrix on the right details some of the key skills and
experience that the Board has identified as valuable to the
effective oversight of the Group and execution of its strategy:
Combination of skills and experience as
identified by the Board
Figures on the right taken as at 30 April 2024 and therefore excludes
Rūta Armonė
Knowledge of operating classifieds businesses
M&A
Digital business (incl. operations and people)
Finance
Technology (incl. cyber security)
Listed company experience (incl. ESG)
8/8
7/8
7/8
5/8
2/8
8/8
Corporate Governance Report
continued
Corporate Governance Report
continued
For more information on the Senior Management team refer to the website
www.balticclassifieds.com
Tarvo Teslon
Portal manager
of KV.ee and
KuldneBörs.ee
Jurijs Fridkins
Portal manager
of GetaPro.lv and
GetaPro.ee
Karin Noppel-Kokerov
Portal manager
of City24.ee
Maksis Karlins
Portal manager
of City24.lv
Daniel Skornjakov
Portal manager
of Auto24.ee
Kristiana Põld
Portal manager
of Osta.ee
Artūras Mizeras
Development director
Viktorija Steponavičiūtė
Portal manager of
Aruodas.lt
(until April 2024)
Tomas Toleikis
Portal manager of
CVbankas.lt
Dovilė Ramoškaitė
Portal manager of
Aruodas.lt
(from April 2024)
Gvidas Borisas
Portal manager of
Kainos.lt and
Paslaugos.lt
Dovilė Lukavičiūtė
Portal manager
of Autoplius.lt
Committee membership key:
Committee Chair
Remuneration Committee
R
N
Nomination Committee
Audit Committee
A
Justinas Šimkus
Chief Executive Officer
Appointed:
2021
Nationality:
Lithuanian
Independent:
No
Experience:
Justinas joined
the Group in 2005 as CEO of
Diginet LTU. Justinas holds
a BSc in Management and
Business Administration from
Vilnius University and an MSc
in International Business
from Vilnius University.
Key external appointments:
Justinas holds directorships
in the following companies:
UAB EIKA Real Estate Fund;
UAB EIKA Development Fund;
and UAB EIKA Residential
Fund.
Lina Mačienė
Chief Financial Officer
Appointed:
2021
Nationality:
Lithuanian
Independent:
No
Experience:
Lina joined the
Group in 2017 as CFO. She
previously worked at PwC
in the audit and assurance
services department from
2010 to 2017. Lina holds
a BSc in Economics from
Kaunas University of
Technology and an MSc in
Management and Business
Administration from ISM
University of Management
and Economics.
Key external appointments:
None
Simonas Orkinas
Chief Operating Officer
Appointed:
2021
Nationality:
Lithuanian
Independent:
No
Experience:
Simonas joined
the Group in 2007 as Skelbiu.
lt Portal Manager, in 2009
was appointed COO of the
Group and was appointed
CEO of Diginet LTU in 2019.
Simonas holds a BSc in
Business Management from
Vilnius University.
Key external appointments:
None
Trevor Mather
Chair
Appointed:
2021
Nationality:
British
Independent:
Independent on
appointment
Experience:
Trevor was Chief
Executive of Autotrader from
2013 until 2020. Previously,
Trevor was President and
CEO of ThoughtWorks,
a global IT and software
consulting company. Before
his time at ThoughtWorks,
Trevor spent almost ten years
at Andersen Consulting (now
Accenture). Trevor holds
an M.Eng. in Aeronautics
and Astronautics from
Southampton University.
Key external appointments:
Trevor holds directorships
in the following companies:
Mather Property Limited;
Mather Consultancy Services
Limited; Mather Family
Charitable Trust; and Wind
HoldCo (Guernsey) Limited.
N
Ed Williams
Senior Independent Non-
Executive Director
Appointed:
2021
Nationality:
British
Independent:
Yes
Experience:
Ed joined
the Group in 2021 as an
independent Non-Executive
Director. Ed was appointed
Chair of Auto Trader prior to
its flotation on the London
Stock Exchange in 2015,
serving in that capacity
until 2023. He served as
an independent director of
idealista, the privately owned
Spanish property portal
from 2015 to 2020. Ed was
founding Chief Executive of
Rightmove, serving in that
capacity from 2000 until his
retirement from the business
in 2013.
Key external appointments:
None (Chair of the Board of
Auto Trader Group plc until
September 2023)
N
R
A
Kristel Volver
Non-Executive Director
Appointed:
2021
Nationality:
Estonian
Independent:
Yes
Experience:
Kristel worked
in the audit department at
KPMG from 2012 to 2015,
was deputy head of Group
Finance Estonia for Nordea
from 2015 to 2017 and from
2017 to 2019 Group CFO for
Eesti Meedia (Postimees
Grupp). Since 2019 she has
been a board member at
MM Grupp, a private equity
investment firm. She holds a
BSc and MSc in Finance from
the University of Tartu and
has been a certified auditor
since 2016.
Key external appointments:
Kristel is a board member
of MM Grupp OÜ, Muffin
Investments OÜ, Business
Shark OÜ and MM Pharma
OÜ. She is also a member
of the supervisory boards
of Postimees Grupp AS,
Magnum AS, Apollo Group
OÜ, AS Kroonpress, TVNET
Latvia, Semetron AS, Beinita
Kodu AS, Leta SIA, Balti
Meediamonitooringu Grupp
OÜ, Linnamäe Lihatööstus AS,
Skeleton Technologies Group
OÜ, Confido Healthcare Group,
Confido Arstikeskus AS, Tooly
OÜ and Kodally OÜ.
N
R
A
Jurgita Kirvaitienė
Non-Executive Director
Appointed:
2022
Nationality:
Lithuanian
Independent:
Yes
Experience:
Jurgita joined
the Group in 2022 as an
independent Non-Executive
Director. Jurgita built her
career at PwC from 1997 to
2015 where she progressed
to become a Director and a
member of the Management
Board for Lithuania.
Subsequently she became
General Manager, and Board
member, of a FinTech startup,
and supplemented this with
being a member of the Audit
Committee at Maxima Grupe.
Jurgita has experience in
provision of outsourced
internal audit services to
FinTech companies. Jurgita
has a BSc in Business
Administration and an MSc in
International Business from
Vilnius University, completed
an International EMBA at the
Baltic Management Institute,
is a fellow member of ACCA,
is a Certified Internal Auditor,
has been a certified statutory
auditor since 2003 and was
President of the Lithuanian
Chamber of Auditors from
2010 to 2014.
Key external appointments:
None
Rūta Armonė
Non-Executive Director
Appointed:
11 June 2024
(post year end)
Nationality:
Lithuanian
Independent:
Yes
Experience:
Rūta joined
the Group in 2024 as an
independent Non-Executive
Director. She is experienced
in corporate, M&A, and
securities law and is a
partner and co-chair of the
Corporate and M&A practice
at the law firm Ellex Valiunas.
Rūta actively participates
in working groups and
associations aimed at
enhancing the legal and
tax environment to support
high-growth tech companies.
She holds an LLM from the
Institute for Law and Finance
(Goethe University Frankfurt)
and an International EMBA
from the Baltic Management
Institute.
Key external appointments:
Partner, Co-Head of Corporate
and M&A practice at Ellex
Valiūnas.
N
R
A
N
1
R
1
A
1
Tom Hall
Non-Executive Director
Appointed:
2021
Nationality:
British
Independent:
No
Experience:
Tom joined the
Group in 2019. He leads the
Internet/Consumer team in
Europe for Apax, where he
has worked for over 20 years.
He has led many of Apax’s
marketplace investments,
including Auto Trader,
idealista and SouFun.
Key external appointments:
Tom is a member of Apax
Partners LLP. Tom also
holds directorships in
the following companies:
idealista Global S.A., NEXT
plc, Wehkamp Management
Pooling Company B.V.,
Wehkamp Retail Holding
Group B.V., Stichting
Administratiekantoor Co-
Investment STAK B, Stichting
Administratiekantoor Sweet
Equity STAK A, and Tinka
Holding B.V.
N
1
from 11 June 2024
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
44
45
Corporate Governance Statement 2024
This Corporate Governance Statement
as required by the UK Financial Conduct
Authority’s
Disclosure
Guidance
and
Transparency
Rules
7.2
(“DTR
7.2”),
together with the rest of the Corporate
Governance Report and the Committee
Reports forms part of the Directors’ Report
and has been prepared in accordance with
the principles of the Financial Reporting
Council’s UK Corporate Governance Code
2018 (the “Code”).
A copy of the Code can be found on the
Financial
Reporting
Council’s
website:
www.frc.org.uk.
The Company has applied the principles of the Code and has complied with the Principles and Provisions of the Code during the financial
year, except for as outlined below:
Code Principle
and Provision
Area
Explanation
Provision 11
At least half the
board, excluding
the chair, should
be non-executive
directors whom the
board considers to
be independent
The Company has one Chair, three Independent Non-Executive Directors, one Non-
Independent Non-Executive Director and three Executive Directors. Excluding the Chair, 42.9%
of the Board is independent.
Shortly after the year end, on 11 June 2024, the Board approved the appointment of a new
Independent Non-Executive Director. Following this appointment, the Board is compliant with
Provision 11.
The FCA Listing Rule 9.8.6 requires companies to provide a statement as to whether it meets the following targets:
Target
Comply or Explain
At least 40% of the board should be women
The Board has 37.5% female representation. Post year end and
following the appointment of Rūta Armonė on 11 June 2024, the
female representation on the Board is 44.4%.
Please see Diversity and inclusion progress during the year and
Inclusion and diversity in the Nomination Committee Report.
At least one of the senior board positions (Chair, Chief
Executive Officer (CEO), Chief Financial Officer (CFO) or Senior
Independent Director (SID)) should be a woman
The Group is pleased to have a female CFO, Lina Mačienė.
At least one member of the board should be from an ethnic
minority background excluding white ethnic groups (as set out
in categories used by the Office for National Statistics)
The Board does not have any Board members from an ethnic
minority group (excluding white ethnic groups).
Please see the Nomination Committee report on page 54 for a
detailed explanation of this.
Additional requirements under the DTR 7.2
are covered in greater detail throughout
the Annual Report for which we provide
reference as follows:
Information
on
the
Group’s
risk
management and internal controls can
be found on pages 38 to 39
Information
with
regards
to
share
capital is presented in the Directors’
Report from page 68
Information on Board and Committee
composition can be found on pages 42
to 43
Information on Board diversity including
the Board diversity policy can be found
on pages 54 and 67
The Company’s obligation is to state
whether it has complied with the relevant
principles and provisions of the Code, or to
explain why it has not done so up to the
date of this Annual Report.
Code Principle
Description
Section
Page
Board Leadership and Company Purpose
A
Effective Board
Effective Board
Nomination Committee Report: Board and Committee performance review
46
55
B
Purpose, strategy, values and culture
Strategic Report:
•
Our Business at a Glance
•
Moving our Strategy Forward
•
S172(1) Statement
Purpose, strategy, values and culture
Board activity and culture
10
13
21
46
46
C
Prudent and effective controls and Board resources
Prudent and effective controls and Board resources
Nomination Committee Report
Governance Report: Leadership structure
46
53
50
D
Stakeholder engagement
Strategic Report: S172(1) Statement
Stakeholder engagement
Understanding our stakeholders
Board priorities, key actions and principal decisions
21
47
47
49
E
Workforce policies and practices
Non-financial Information and Sustainability Statement
Strategic Report: Sustainability Report
36
22
Division of Responsibilities
F
Board roles
Governance Report: Board of directors
Board roles and responsibilities
Leadership structure
Board and committee meetings and attendance
Directors' Report
42
50
50
51
66
G
Independence
Independence
51
H
External commitments
External commitments
52
I
Board efficiency
Nomination Committee Report
53
Board Composition, Succession and Evaluation
J
Appointments to the Board
Governance Report: Board of Directors
Appointments to the Board
Board tenure
Board training and professional development
Annual General Meeting and Director re-election
Directors' Report
Nomination Committee Report
42
52
52
52
52
66
53
K
Board composition
Board Composition, Succession and Evaluation
Nomination Committee Report
52
53
L
Annual Board evaluation
Nomination Committee Report
53
Audit, Risk and Internal Control
M
Effectiveness of external auditor and internal audit
and integrity of accounts
Audit Committee Report
56
N
Fair, balanced and understandable assessment of
Company’s prospects
Audit Committee report: Going concern and Viability Statement
Directors' Report: Statement of Directors’ responsibilities in respect of the
Annual Report and Accounts
57
70
O
Internal financial controls and risk management
Strategic Report: Risk management framework
Strategic Report: Principal risks and uncertainties
Audit Committee Report
38
38
56
Remuneration
P
Linking remuneration with purpose and strategy
Directors' Remuneration Report
60
Q
A formal and transparent procedure for developing
policies
Directors' Remuneration Report
60
R
Independent judgement and discretion
Directors' Remuneration Report
60
Throughout this Corporate Governance Report, we explain how we comply with the Principles and Provisions of the Code:
Corporate Governance Report
continued
Corporate Governance Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
46
47
Board Leadership and Company Purpose
Effective Board
The Board understands that 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. Entrepreneurs Justinas Šimkus
(CEO) and Simonas Orkinas (COO) and
their long-standing team have spent over
10 years building a collection of market-
leading businesses and strong brands.
Composed of industry experts, the Board
consists of both Executive and Non-
Executive
Directors
whose
extensive
industry
experience
and
knowledge
complement each other. Each Director
operates with respect for others and has
a clear vision of the Company's purpose.
Most Board members are also investors
in the Company, therefore promoting
success is in their best interest.
Purpose, strategy, values and
culture
The
Group
has
a
culture
that
is
entrepreneurial,
team-focused,
and
ambitious, firmly rooted in principles
of equality and inclusivity. The Board
acknowledges the importance of this
culture in the success of the business
and is confident that it aligns with the
Company's purpose, values, and strategy.
In fact, the Board considers this to be the
Company's "super-power". The Board is
responsible for establishing the Group's
strategy and defining its purpose, which
is to connect consumers with advertisers
and facilitate easier transactions for them.
Board activity and culture
The Board actively assesses and monitors
the culture of the Company. The following
table summarises some of the Board
activity and how it links to the culture of
the organisation. For more information on
Board activity, Stakeholders and Section
172(1) Statement see pages 21 and 47 to
49.
Prudent and effective controls
and Board resources
The Board provides leadership within
a framework of prudent and effective
controls. It has clear roles and divisions
of responsibilities. The framework, along
with
its
Committees,
outlines
duties,
responsibilities, lines of accountability,
and oversight. These controls ensure
decision-making happens in a timely
manner at the appropriate level. The Board
continuously monitors the framework to
ensure it aligns with the business needs.
The Board supports Senior Management
in
implementing
strategic
priorities,
while providing oversight and creative
challenges.
Board activity
Link to culture
Review the results of the Employee
engagement survey
To gain a deeper understanding of employees’
perspectives and learn more about what
matters the most to them.
Chair and NED engagement sessions
The Chair and NEDs attend bi-annual in-
person employee engagement sessions on a
rotating basis throughout the year, answering
questions posed by the employees.
CEO, CFO and COO directly
responsible for workforce issues
The Executive Directors work alongside the
workforce and have direct responsibility for
workforce issues. This role establishes a
direct connection between the employees and
the Board, emphasising that the culture is set
from the top.
Monitor and discuss employee
matters including recruitment,
retention, well-being and diversity
Enables the Board to gauge the culture and to
identify areas where change is necessary to
improve the culture.
Oversee employee remuneration and
rewards
Discussions in the Remuneration Committee
enable assessment and oversight to ensure
that employee remuneration and rewards
support employee motivation.
Set Purpose and values
Working with the team to build a collection
of market-leading businesses and strong
brands. The digital marketplaces we operate
promote trust, fairness and efficiency.
Support and maintain an open culture
The Board supports an open culture. BCG
has a dynamic and motivated team that
enjoys working together and having fun. This
collaboration and camaraderie is our “super-
power”.
Oversee the strategy of each of the
four vertical business areas
This gives the Board a chance to engage
directly with the portal managers and
understand the issues important to them,
including their individual business areas,
markets, customer and employee needs.
This promotes knowledge sharing, improves
motivation and supports team building.
Approve Modern Slavery Statement
and monitoring the Gender Pay Gap
Enables the assessment of the broader
culture of the Group and its relationships with
suppliers and employees.
Approve Key workforce-related
policies including whistle-blowing and
Code of Conduct
Gives the Board oversight to ensure that
policies reflect the values and desired
behaviours of employees.
Our stakeholders
Investors:
Allow us to strive to be the best for all our
stakeholder groups
Consumers and Advertisers:
Are at the heart of our purpose
Our People:
We all work together to ensure the long-term
success of our business
Suppliers:
We view our suppliers as partners who help us
deliver our purpose
Regulatory bodies:
We prioritise ensuring that we meet all regulatory
requirements
Environment and Community:
We think about the future and what condition we
leave the Earth in for future generations
The Executive Directors determined that there had been
no significant changes to the stakeholder base.
The workshop drilled down into any actual or perceived
changes in the markets where the Group operates.
It reassessed all stakeholder groups, their material
interests, engagement methods, and Board decisions
related to each recognised stakeholder group.
The resulting stakeholder matrix was reviewed by the
Board, noting no significant changes, difficulties or
challenges.
The stakeholder analysis assures the Board that the
potential impacts on our stakeholders are carefully
considered by management when developing plans for
Board approval.
The Stakeholder
analysis workshop
Stakeholder engagement
The Board recognises the importance of
understanding the Company’s different
stakeholder groups. By understanding
them, the Board can ensure that they are
represented both at the Board level and
throughout the workforce.
During the year, the Executive Directors
conducted a review of the Company’s
Stakeholders, with a particular emphasis
on ensuring there had been no changes to
these stakeholder groups. The Group is in
a strong and stable position, and as such,
the relationships with its stakeholders
remain consistent and harmonious.
Understanding our Stakeholders
Table on the following page summarises
the
Group’s
key
Stakeholders
and
highlights what issues matter the most
to them and how the Board engages with
them. The Board recognises that this has
been a period of stability and there have
been no new challenges or difficulties with
any stakeholder group.
The table on page 48, which should be read
in conjunction with the Section 172(1)
Statement on page 21, the Statement of
Engagement with Employees on page 69
and the Statement of Engagement with
Other Business Relationships on page
69,
summarises
the
key
stakeholder
groups and matters that are of the most
importance to them.
Corporate Governance Report
continued
Corporate Governance Report
continued
GOVERNANCE REPORT
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Baltic Classifieds Group PLC Annual Report and Accounts 2024
48
49
Board priorities
Key actions and principal decisions
Strategy and
operations
•
B2C and C2C pricing actions
•
Reviewed M&A strategy, value-creating M&A opportunities and risks, investor
feedback and market conditions
•
Reviewed strategic and operational performance
•
Reviewed financial performance against budget
Leadership and
employees
•
Approved a 9% increase to Non-Executive Director fees
•
Appointed Artūras Mizeras as Development director (non-statutory)
•
Appointed Rūta Armonė as an independent Non-Executive Director
Finance and
Investor
Relations
•
Approved the 2024 forecast
•
Reviewed the 2025 budget for approval post year end
•
Received reports and updates on investor relations activities including the
Investor roadshows
•
Approved the Annual report and Accounts for the year ending 30 April 2023
•
Approved the final dividend payment for 2023
•
Approved the interim dividend payment for 2024
•
Capital allocation
Risk
management
•
Reviewed the Risk Register and updated the risk ratings to reflect latest
positions
•
Oversaw the review of the effectiveness of the external audit process and the
internal audit function by the Audit Committee
•
Reviewed the Group’s internal controls systems, compliance function, anti-
money laundering systems and controls, as well as procedures for detecting
fraud and whistle-blowing procedures
•
Received an update on the Disaster Recovery plan
•
Received a report on the minor data breach situation, reviewed the steps taken
to prevent similar breaches in the future, and ensured correct procedures had
been followed
•
Received a report on the handling of a particular client complaint which
resulted in the Board scheduling further discussions about content moderation
and protecting customers from scam operations
Governance
•
Agreed the internal Board effectiveness review process and subsequent results
and action plan
•
Reviewed and approved the Audit, Nomination and Remuneration Committees’
Terms of Reference, Matters Reserved for the Board and Division of
Responsibilities
•
Approved the AGM 2023 resolutions
•
Received regulatory updates
•
Approved charitable donations
•
Undertook director training and development, in particular Market Abuse
Regulation refresher training
ESG
•
Approved new
ESG targets
•
Approved the Modern Slavery Statement
•
Discussed the results of the employee survey and management’s response plan
•
Received feedback from employee meetings
in Vilnius and Tallinn, and
recognised suggested areas for improving communication with Estonia.
•
Met with three customers from each of the Auto, Real Estate and Jobs business
areas and listened to their views and suggestions
Our People
Regulatory bodies
Environment and
Community
Consumers and
Advertisers
Investors
Suppliers
What matters to our Investors
•
Business operations
•
Sustainable, profitable growth runway
•
Returns on investment
•
Dividend and capital policies
•
Share price
•
Risks to the business
•
Risk management
•
Transparency
•
Responsible business (demonstrated
through Environmental, Social and
Corporate Governance)
•
Values and culture of the Company
•
Internal and external audit processes
Board oversight and engagement
mechanisms
•
Investor roadshows, including our first
roadshow in North America and the Chair
joining Executive Directors on the UK
roadshow for the first time
•
Regular personal meetings with potential
investors
•
Fireside chats with brokers
•
RNS newswires
•
Annual Report and Accounts
•
Relevant updates on corporate website
•
Annual General Meeting
•
Electronic communications to
Shareholders
•
Views of voting agencies
What matters to our consumers (C) and
advertisers (A)
•
Market reach (A)
•
Breadth of network
•
Competitive rates (A)
•
Functionality and intuition of sites
•
Reputation
•
Pragmatism
•
Customer service
•
Training on new functionalities (A)
•
Credibility of sellers (C)
•
Measures to protect customers
•
Data protection
•
Prices (primary effect on advertisers and
a secondary on consumers)
Board oversight and engagement
mechanisms
•
This year’s Strategy day focused on
capturing feedback from customers.
The Board met customers from each
Auto, Real Estate and Jobs business
areas, discussed what matters to those
customers and captured feedback on
BCG’s products and services
•
Access to portal managers
•
Portal managers engage with Executive
Directors daily
•
Portal Managers feed customer
relationship information back to the
Board
•
Portal Managers rotate attending Board
meetings
•
The Board intentionally drive strategy and
decision-making to improve the customer
experience
•
C2C and B2C pricing events
•
Informal feedback from customers which
is then fed back to the Board in meetings
What matters to Our People
•
How the Board of a listed company
operates
•
An inclusive and diverse working
environment
•
Positive culture, team spirit
•
Opportunities for career and personal
development
•
Having a voice
•
A safe and secure workplace
•
Good pay and benefits
•
Gender equal pay
•
Whistle-Blowing Policy and procedure for
raising concerns
•
Good working practices
•
Modern slavery policy
Board oversight and engagement
mechanisms
•
Chair and NEDs sessions with employees
•
Employee engagement questionnaire.
The survey showed that more than 95%
of employees are proud to work at BCG
and these results were discussed at
Board
•
Regular and scheduled meetings within
business units where employees have the
opportunity to ask questions of Senior
Management; the feedback from these
sessions is fed back to the Board during
vertical strategy sessions
•
CEO, CFO and COO update at every
board meeting which includes relevant
workforce updates
•
Regular social activities
What matters to our Suppliers
•
Prompt and accurate payment
•
Long-term partnerships
•
Collaboration
•
Responsible sourcing
•
Regulatory compliance
•
The Company's financial performance
•
Growth prospects
•
Reputation
Board oversight and engagement
mechanisms
•
Performance reports discussed and
considered at Board
•
Continuous development of our supplier
management framework to strengthen
our collaboration with strategic suppliers
who are instrumental in enabling the
realisation of our strategic objectives
What matters to our Regulatory bodies
•
Legal and safe operations with
compliance with relevant regulations
•
Worker pay and conditions
•
Waste management and environmentally
sound practices
•
Consumer protection
•
Product safety
•
Health and safety
•
Privacy and security
•
Gender equal pay
Board oversight and engagement
mechanisms
•
Board oversight and approval of filings
with Companies House
•
Board receives updates on legal matters
at Board meetings
•
Reviews communications with the FRC
What matters to our environment and
community
•
Recognised environmental and societal
standards
•
Environmental and social issues,
including climate change, carbon
emissions, human rights, waste
management, and recycling
•
Having a positive impact on the
community
•
Environmental and socially responsible
business practices and credentials
Board oversight and engagement
mechanisms
•
ESG working group and regular updates
at Board meetings
•
Board involvement in the preparation of
the ESG reporting in the Annual Report
and Accounts
•
Senior Management reports to the Board
on social and environmental concerns
arising within their business units
Corporate Governance Report
continued
Corporate Governance Report
continued
Board priorities, key actions and principal decisions
The following table lists the Board’s priorities, key actions and principal decisions during the year, acknowledging the different
stakeholder groups affected and aligning the decisions with the S172(1) factors:
The likely consequences of any decision in the
long terms
The interests of our employees
The need to foster business relationships with key
stakeholders
The impact of the Group’s operations on the
community and environment
The desirability of maintaining a reputation for
high standards of business conduct
The need to act fairly as between members
Links to S172(1) icons:
Stakeholder icons:
Investors
Consumers and
advertisers
Our people
Suppliers
Regulatory
bodies
Environment and
community
A
B
C
D
E
F
A
B
C
D
E
B
A
C
E
A
C
E
C
D
E
F
A
B
C
D
E
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
50
51
Division of Responsibilities
Responsibilities of the Board
The Board comprises the Chair, the CEO,
the CFO, the COO, a Non-Executive Director
appointed by the Major Shareholder (the
“Nominee Director”), a Senior Independent
Non-Executive Director (“SID”) and two
Independent
Non-Executive
Directors.
Subsequent to the year end, this figure
was increased to three Independent Non-
Executive Directors.
The Board is dedicated to upholding
the
highest
standards
of
corporate
governance.
The Board oversees the
management of the Group and has the
Board roles
Chair
•
Leads the Board and is responsible for the overall effectiveness of Board
governance
•
Sets the Board’s agenda, with emphasis on strategy, performance and value
creation
•
Ensures good governance
•
Shapes the culture of the Board, promoting openness and debate
Chief Executive Officer
•
Develops strategies, plans and objectives for proposing to the Board
•
Leads the organisation to ensure the delivery of the strategy agreed by the
Board
Chief Financial Officer
•
Runs the Group on a day-to-day basis and implements the Board’s decisions
•
Provides strategic financial leadership of the Group and runs the finance
function on a day-to-day basis
•
Leads investor communication
Chief Operating Officer
•
Runs the Group on a day-to-day basis and implements the Board’s decisions
•
Heads the IT Team
Senior Independent Non-Executive Director
•
Acts as a sounding board for the Chair
•
Available to Shareholders if they require contact both generally and when the
normal channels of Chair, CEO or CFO are not appropriate
•
Leads the annual appraisal of the Chair’s performance and the search for a
new Chair, when necessary
Non-Executive Directors
•
Demonstrate independence and impartiality (other than the Nominee Director)
•
Bring experience and special expertise to the Board
•
Constructively challenge the Executive Directors
•
Monitor the delivery of the strategy within the risk and control framework set
by the Board
•
Monitor the integrity and effectiveness of the Group’s financial reporting,
internal controls and risk management systems
Company Secretary
•
Responsible for advising the Board and assisting the Chair in all corporate
governance matters
Audit Committee
•
Assists the Board in discharging its
financial reporting responsibilities
•
External and internal audits and
controls, including reviewing and
monitoring the integrity of the
Group’s annual and interim financial
statements
•
Reviewing and monitoring the extent
of the non-audit work undertaken by
external auditors
•
Advising on the appointment of
external auditors
•
Overseeing the Group’s relationship
with its external auditors
•
Reviewing the effectiveness of the
external audit process
•
Reviewing the effectiveness of
the Group’s internal audit, internal
controls, whistle-blowing and fraud
systems
Remuneration Committee
•
Assists the Board in determining its
responsibilities in relation to Executive
Directors’ remuneration
•
Makes recommendations to the Board
on the Company’s policy on Executive
remuneration
•
Determines the individual
remuneration and benefits package
of each of the Executive Directors, the
Chair and the Company Secretary)
Nomination Committee
•
Assists the Board in discharging
its responsibilities relating to the
composition and make-up of the Board
and any Committees of the Board
•
Responsible for periodically reviewing
the Board’s structure and identifying
potential candidates to be appointed
as Directors or Committee members
as the need may arise
•
Ensuring a diverse pipeline
Leadership structure
The Board is responsible for providing
leadership to the Group. The structure
of the Board, its Committees and the
Executive Management provides oversight
whilst
demonstrating
a
balanced
approach to risk, aligned with the Group’s
culture.
The Board delegates certain matters to its
three permanent Committees, the Terms
of Reference of which are available on the
Company website. The following shows
the role of each of the Board Committees:
authority to make decisions on behalf of
the Company. The Board entrusts certain
responsibilities
to
Board
Committees
and delegates the execution of approved
matters to the Executive Management for
day-to-day operations of the business.
The Board sets the Group’s purpose,
values and strategy, ensuring they align
with the Company’s culture. It provides
entrepreneurial leadership, promotes long-
term sustainable success and Shareholder
value creation, and oversees the Group’s
risk management processes and internal
control environment.
Executive Management
Executive
Management
(the
three
Executive Directors) is responsible for
the day-to-day running of the business,
carrying out and overseeing operational
management
and
implementing
the
strategies the Board has set.
Senior Management
During the year, the Senior Management
was made up of the three Executive
Directors, Development Director and 10
portal managers. The Senior Management
meets regularly and no less than weekly.
Portal managers come to any Board
meetings
where
their
area
is
being
discussed and are encouraged to stay for
the whole Board meeting.
ESG working group
The ESG working group consists of five
members: the three Executive Directors
and two other employees. The Chair,
together
with
Non-Executive
Director
Jurgita Kirvaitiene, serve as sponsors to
the ESG working group and are actively
involved in its activities. The working
group met four times during the year and
the key areas of responsibility are:
•
Climate change and business impact
•
Energy management
•
Emissions monitoring and reporting
•
Culture and values
•
Employee engagement and well-being
•
Talent attraction and retention
•
Diversity and inclusion
•
Access and affordability
•
Local communities
•
Data security
•
Customer privacy
•
Corporate governance and integrity
Corporate Governance Report
continued
Board’s role in Audit, Risk and
Internal Control
The
Board’s
objective
is
to
give
Shareholders
a
fair,
balanced
and
understandable
assessment
of
the
Group’s position and prospects for the
business model and strategy and it has
responsibility for preparing the Annual
Report. The Board is also responsible for
maintaining adequate accounting records
and seeks to ensure compliance with
statutory and regulatory obligations.
The Board, with the assistance of the
Audit Committee, monitors and oversees
the Group’s risk management process.
At least twice a year the Board reviews
and approves the risks identified and
the mitigation plan suggested by the
Executive Management.
Board’s role in remuneration
The Board is conscious that remuneration
policies and practices must be designed
to support strategy and promote the
long-term sustainable success of the
Group. It delegates responsibility to the
Remuneration
Committee
to
ensure
that there are formal and transparent
procedures
for
developing
policy
on
Executive remuneration and determining
Director
and
Senior
Management
remuneration.
Board and Committee meetings
and attendance
Board and Committee meetings are held
either in person or virtually.
The table below sets out attendance at
the scheduled meetings during the year.
Attendance is expressed as the number
of scheduled meetings attended out of
the number of such meetings possible or
applicable for the Director to attend.
During the period, the Non-Executive
Directors held a number of informal get
togethers. In the event a Director was
unable to attend a meeting they still
received all the papers for the meeting and
were updated on matters discussed at the
meeting.
Independence
The Code recommends that at least half the
board of directors of a company, excluding
the Chair, should comprise non-executive
directors whom the board considers to be
independent. Noting that the Chair is only
independent upon appointment. As at the
year-end date, the Company did not comply
with the Code requirement to have at least
half of the Board members as independent
(Provision 11). We are pleased to report that
shortly after the year end, on 11 June 2024,
the Board approved the appointment of a
new Independent Non-Executive Director.
Following this appointment, the Board is
compliant with Provision 11.
As at the financial year end date, the
balance of independence was in favour
of the ‘non-independent’ due to the role of
Non-Executive Director Tom Hall. Pursuant
to the Relationship Agreement, the Major
Shareholder
may
appoint
one
Non-
Executive Director to the Board for so long
as it (together with any of its Associates)
holds voting rights over 10% or more of the
Company’s issued share capital. The Major
Shareholder’s first appointed representative
Director is Tom Hall. Tom Hall is therefore
not an Independent Non-Executive Director.
If the Major Shareholder’s shareholding fell
below 10% then Tom Hall would no-longer
serve on the Board and the Independent and
Non-Independent Directors would equal 3
and 3 respectively plus the Chair.
The Major Shareholder will consult in
advance with the Nomination Committee
regarding
the
identity
of
any
Director
proposed to be nominated by it. In addition,
for so long as the Major Shareholder
(together with any of its Associates) holds
voting rights over 10% or more of the
Company’s issued share capital, the Major
Shareholder’s representative Director shall
be a member of the Nomination Committee
and shall be entitled to attend as an observer,
all meetings of the Audit Committee and the
Remuneration Committee.
The
Company
has
complied
with
the
independence provisions included in the
Relationship Agreement and, as far as the
Company is aware, the Major Shareholder
has also complied with the independence
provisions.
Board and Committee meetings and attendance
Independence
Board Director
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Trevor Mather
11/11
-
4/4
-
Justinas Šimkus
11/11
-
-
-
Lina Mačienė
11/11
-
-
-
Simonas Orkinas
11/11
-
-
-
Ed Williams
11/11
5/5
4/4
5/5
Tom Hall
11/11
-
4/4
-
Kristel Volver
11/11
5/5
4/4
5/5
Jurgita Kirvaitienė
9/11
5/5
3/4
3/5
Chair
Independent NEDs
Non-Independent Director
As at 2 July 2024, there were 4 independent NEDS and 4
non-independent directors.
30 April
2024
1
3
4
Corporate Governance Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
52
53
Board Composition, Succession and
Evaluation
Corporate Governance Report
continued
External commitments
The Company is mindful of the time
commitment required from Non-Executive
Directors in order to effectively fulfil their
responsibilities on the Board, particularly
providing
constructive
challenge
and
holding
Executive
Management
to
account and utilising their diverse skills
and experience to benefit the Company
and provide strategic guidance.
As part of any appointment process,
prospective Directors are asked to provide
details of any other roles or significant
obligations that may affect the time they
are able to commit to the Company. Each
Director is responsible for informing the
Board of any external appointments or
significant commitments as they arise
and these are considered and monitored
by the Chair.
Appointments to the Board
The Board is composed of three Executive
Directors
and
five
Non-Executive
Directors.
One
Non-Executive
Director
represents a Major Shareholder. After
the end of the financial year, on 11 June
2024, Rūta Armonė joined the Board as
an Independent Non-Executive Director
and as a member of all of the Board
Committees.
Board tenure
The Non-Executive Directors post IPO,
were all appointed on 2 June 2021, and
Jurgita Kirvaitienė
was appointed on
17 May 2022. The Chair will continue to
monitor the tenure of Board members
and consider this as part of the broader
succession planning.
Board training and professional
development
During the year, the Board received
training on:
•
Macroeconomic update
•
Market Abuse Regulations
•
Key trends in remuneration
•
Takeover defence strategies
•
Internal ESG updates
The Chair’s approval is required prior to a
Director taking on any additional external
appointment. The Chair’s approval will
only be given once the Chair is satisfied
and the Director confirms that, as far as
they are aware, there are no conflicts of
interest.
Non-Executive Director Tom Hall is a
partner at Apax Partners and a director of
other entities in which funds advised by
Apax Partners have an interest. The Major
Shareholder is controlled by funds advised
by Apax Partners.
Each Director’s biographical details
and significant time commitments
outside of the Company are set out
in the Board biographies on pages 42
to 43.
Change in Directors’
commitments
During the year, the Board approved the
external appointment of Trevor Mather
as Non-Executive Director of a limited
company that forms part of the Apax
group.
The Chair is responsible for ensuring that
all of the Directors are appropriately briefed
on matters arising at Board meetings and
that they have full and timely access to
accurate and relevant information.
To enable the Board to discharge its duties,
all Directors receive sufficient information,
including briefing papers distributed in
advance of their meetings.
The Committees of the Board have access
to
sufficient
resources
to
discharge
their duties, including external advisers
and access to internal resources and
personnel.
Where they judge it to be necessary to
discharge their responsibilities, Directors
may
obtain
independent
professional
advice at the Company’s expense.
All Directors also have access to the
advice of the Company Secretary, who is
responsible for advising the Board on all
governance matters.
Board Directors regularly receive updates
to
improve
their
understanding
and
knowledge about the business and the
environment in which it operates. As part
of the year end reporting process, each
Director is asked to identify skills and
experience areas where they excel. For
more on this see page 42.
Board meetings generally include one
or
more
presentations
from
Senior
Management on areas of strategic focus.
Specific business-related presentations
are
given
to
the
Board
by
Senior
Management and external advisors when
appropriate.
Annual General Meeting and
Director re-election
The Company’s Articles of Association
specify that a Director appointed by the
Board must stand for election at the first
AGM subsequent to such appointment
and at each AGM thereafter, every Director
shall retire from office and seek re-election
by Shareholders. This is in line with the
Code, which recommends that Directors
should be subject to annual re-election.
All
Directors,
having
been
appointed
during the period under review, will stand
for election at the Company’s 2024 AGM.
The Board therefore recommends that
Shareholders
approve
the
resolutions
to be proposed at the Annual General
Meeting 2024 relating to the election of
the Directors.
new
Committee meeting attendance can be found on page 51.
Committee Terms of Reference can be found on our
corporate website at:
balticclassifieds.com/corporate-governance.
The technology sector is traditionally one
which has difficulty attracting female
representation, and we are pleased to have
been recognised within “Top Ten Best
Performers” within FTSE250 and ranked
number two within the Technology sector
by the 2023 FTSE Women Leaders Review.
Trevor Mather
Chair of the Nomination Committee
“
Nomination Committee Report
Nomination Committee membership
Trevor Mather
- Chair - Appointed on 2 June 2021
Non-Executive Director
Kristel Volver
- Appointed on 2 June 2021
Independent Non-Executive Director
Ed Williams
- Appointed on 2 June 2021
Senior Independent Non-Executive Director
Tom Hall
- Appointed on 2 June 2021
Non-Executive Director
Jurgita Kirvaitienė
- Appointed on 17 May 2022
Independent Non-Executive Director
Key responsibilities
Board and Senior Management composition:
•
review the structure, size and composition of the Board, its
Committees and the Senior Management; and
•
evaluate the combination of skills, experience, diversity,
independence and knowledge on the Board, its Committees
and the Senior Management.
Succession planning:
•
review the leadership needs of the organisation, both
Executive and Non-Executive Directors, to ensure the
continued ability of the organisation to compete effectively
in the marketplace;
•
ensure plans are in place for orderly succession to the Board
and the Senior Management positions, considering the
challenges and opportunities facing the Group, as well as the
skills and expertise needed on the Board and in the Senior
Management team in the future;
•
have oversight over talent development, with a view to
monitoring and overseeing the development of a diverse
pipeline within the Group; and
•
identify and nominate potential candidates for Board
vacancies as and when they arise, in line with succession
planning.
Board effectiveness:
•
review the independence and time commitment of the Non-
Executive Directors;
•
review and act upon the results of the Board performance
evaluation process and assess how effectively members
work together to achieve objectives; and
•
review the interaction between the Board and its Committees.
Diversity and Inclusion:
•
oversee diversity and inclusion across the Group and monitor
progress made against objectives.
Main activities during the year
During the year, the Committee has met three times and its key
activities were:
•
Consider the internal Board and Committee effectiveness
review results and create an action plan;
•
Search for a new independent Non-Executive Director; Rūta
Armonė was appointed as an Independent Non Executive
Director as of 11 June 2024 and has joined all of the Board
Committees.
•
Succession planning for the Board and key employees;
•
reviewing the gender and ethnic diversity of the Board and
Senior Management and Board Diversity Policy;
•
review and recommendation of the Committee’s Terms of
Reference for approval by the Board.
Planning for the year ahead:
•
Oversee
the
implementation
of
the
selected
Board
effectiveness review recommendations;
•
Continue
to
monitor
Board
and
Senior
Management
succession; and
•
In line with succession planning, to actively look for an
additional Board member.
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
54
55
Dear Shareholders
On behalf of the Board, I am pleased to present
the Nomination Committee Report for the financial
year ending 30 April 2024.
Succession planning and Board
composition
During the year we have been searching for a
new independent Non-Executive Director with a
particular focus on candidates who have a high
appreciation of the business environment in the
Baltics, Scandinavia and/or Eastern Europe. All
appointments to the Board are made on merit,
against objective criteria and with due regard to
the benefits of diversity on the Board.
We have utilised our extensive networks, and
conducted a thorough search process including
a search on our own job site, CVBankas, and are
pleased to confirm that we have appointed Rūta
Armonė to join the Board as an Independent Non-
Executive Director and a member of all of our
committees as of 11 June 2024.
During the recruitment process, it has become
apparent that the NED fees are particularly low for
a company the size of BCG and this issue has been
raised to the Remuneration Committee.
As part of the search process we reviewed the
diversity and skills of the Board and will continue
to monitor the market to ensure the composition
of the Board has the right balance of diversity,
skills and experience to support its strategy and
purpose.
Succession planning and Senior
Management
Despite
a
continued,
remarkable
level
of
consistency in both the Board membership and in
the senior executive ranks, effective succession
planning is critical to the long-term success of
the Company. The continual review of succession
plans continued in the year to ensure that
arrangements are in place for orderly succession
in the context of the Group’s strategy for the Board
and Senior Management. The Board recognises the
importance of developing our employees in relation
to succession planning for senior positions. The
succession planning activities included a review of
the key Group employees and potential knowledge
sharing activities and development plans in order
to recognise and grow our internal talent.
Appointments to the Board
As there were no appointments during the year,
there were no induction programmes to disclose.
Inclusion and diversity
The Committee strives to embed inclusion in
everything that it does, and succession planning
and the appointment process are key in promoting
diversity in a way that is consistent with the
Company’’s long term strategy.
Our female representation on the Board is 37.5%,
including the Audit Committee Chair, the CFO and
one Non-Executive Director. The technology sector
is traditionally one which has difficulty attracting
female representation, and we are pleased to have
been recognised within “Top Ten Best Performers”
within FTSE250 and ranked number two within
the Technology sector by the 2023 FTSE Women
Leaders Review.
Listing Rule 9.8.6, states the Group must comply
or explain on three diversity targets. For more
Nomination Committee Report
continued
Figures above taken
as at 30 April 2024
Diversity
characteristics
Figures above taken
as at 30 April 2024
Gender diversity
Lithuanian
British
Estonian
Nationality
4
3
1
30-39
40-49
50-59
60+
Age
4
1
1
2
Full Board
Male
Female
62.5%
37.5%
Non-Executive
Directors
Male
Female
60.0%
40.0%
Executive
Directors
Male
Female
66.7%
33.3%
on our compliance with this please see the
Governance Report on page 44 and specifically
the table prescribed by LR 9.8.6R(10) on page 67.
We are already familiar with the existing targets to
have 40% female representation on the Board by
2025 (FTSE Women Leaders target) and to have
one director from a minority ethnic group (as set
out in categories used by the Office for National
Statistics (“ONS”) by 2024 (the Parker Review).
The Parker Review 2023 has also asked all FTSE
350 companies to set their own target for the
percentage of their senior management group who
self-identify as being in an ethnic minority group.
We will report our intentions to the Parker Review
by December 2024.
The Committee continues to monitor diversity
as is relevant for the Baltic region and takes into
account its diversity targets when considering
Board appointments and hiring or promoting to
leadership positions. Given that the population
of the Baltic States in which the Group operates
includes principally white ethnic groups, the
Parker Review target is more challenging for the
Company.
We believe that the ethnic diversity
of the Board and employees should reflect the
general population in which the Company operates
and that our commitment to diversity can be better
evidenced by other diversity metrics such as
gender and nationality. We speak in detail about
ethnic diversity and the Baltic region in the Annual
Report 2023, page 74.
For information on Board Diversity Policy, see
page 67.
Biographies for each Director are available on
pages 42 to 43.
Details of the key skills and experience that
the Board has identified as valuable to the
effective oversight of the Group and execution
of its strategy can be found on page 42.
For Board training and development see the
Governance Report on page 52.
Election and re-election of Directors
In accordance with the Code, all Directors will
offer themselves for re-election by Shareholders
at the AGM. Both the Committee and the Board
are satisfied that all Directors continue to be
effective in, and demonstrate commitment to, their
respective roles on the Board and that each makes
a valuable contribution to the leadership of the
Company.
The Board therefore recommends that Shareholders
approve the resolutions to be proposed at the 2024
AGM relating to the election of the Directors.
I will be available at the AGM to answer any
questions about the work of the Nomination
Committee.
Chair effectiveness
The Code states that, led by the Senior Independent
Director (the “SID”), the Non-Executive Directors
should meet without the chair present at least
annually to appraise the Chair’s performance, and
on other occasions as necessary. In February 2024,
the SID met with the Board members to discuss
the performance of the Chair and found no areas
of concern.
Nomination Committee Report
continued
Process of the internal board effectiveness review:
Outcomes of the internal board effectiveness review:
Progress made against key areas of focus from the prior year's external board effectiveness review (year
end 2023)
The Company Secretary produced
a bespoke questionnaire for Board
members designed to capture
reflections on Board and Committees
performance during the year
To start looking for
additional non-
executive director
to increase Board
membership
The following action
points were identified. The
progress against these
actions will be reported in
the following year:
To ensure the
Director induction
process is
reviewed and is
comprehensive.
Provide board
materials ahead
of the Board
meeting in a
timely manner.
Maintain a record of key
risks discussed during Board
meetings and share it with the
Board every half a year and
ensure the full Risk Register is
on the Board agenda at least
annually.
Once completed and returned, the
results were analysed by the Company
Secretary and presented to the Board
on an anonymous basis in the form of
a report
The Board and each committee
reviewed the report and produced
action plans for their relevant areas.
The action plans were captured in
the Board and Committee minutes
to provide easy reference and
accountability.
1
1
2
3
4
2
3
Responsibility
Key Action
Update
Board
Build upon the strategic objectives and to ensure
that purpose and strategic objectives are considered
in greater detail against Board decision making
Introduced cover pages for Board materials noting which strategic
objectives and stakeholder groups are being impacted to facilitate
discussion before decision making.
Nomination
Committee
Board and Senior Management succession planning
with a particular focus on diversity
Board and Senior Management succession plan was reviewed during
the year. See page 67 for details on the review and update of the Board
diversity policy and page 54 for the response to the Parker review.
Chair and
Company
Secretary
Review the appropriateness of Director development
See page 52 for details of training and development during the year
Chair and
Company
Secretary
Review the forthcoming agenda items to ensure
appropriate depth and breadth is covered
Forthcoming agenda items were reviewed and the annual Board
agenda schedule was produced by the Company Secretary in
consultation with Committee Chairs. This is ongoing with a continued
focus on improvement.
The Nomination Committee Report is approved by the Board and signed on its behalf by:
Trevor Mather
Chair of the Nomination Committee
2 July 2024
Board and Committee
performance review
During
the
financial
year,
the
Board
participated
in
an
internal
Board
performance review.
The Board is committed to an annual
review of its own and its Committees’
performance, with an externally-facilitated
effectiveness review carried out at least
every three years in compliance with
the Code. The last externally facilitated
effectiveness review was undertaken in
2023.
As part of the Board performance review,
the quality of information, resources, and
materials used were reviewed. The Board
is committed to ensuring the papers are
accurate, clear, comprehensive and up to
date. The Committee Terms of Reference
were
also
reviewed
during
the
year,
along with the role and function of each
Committee.
The Directors consider the evaluation
of the Board and its Committees and
members to be an important aspect of
corporate governance.
Directors
have
the
right
to
express
opposition
or
concerns
about
Board
decisions, which will be noted in the
minutes. They are also entitled to seek
independent professional advice at the
Company's expense if deemed necessary.
Throughout the year, no Director raised any
concerns regarding the Board's operation
or Company management.
The
evaluation
of
Board
Committee
performance found that all Committees
were considered to be well chaired and
operating effectively. Further details of the
composition, role and activities of each
Committee can be found on pages 50 to
65.
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
56
57
Audit Committee Report
Committee meeting attendance can be found on page 51.
Committee Terms of Reference can be found on our
corporate website at:
balticclassifieds.com/corporate-governance.
The Annual Report explains the
Group’s strategy, financial performance
and position in a way which is fair,
balanced and understandable
Kristel Volver
Chair of the Audit Committee
“
Audit Committee membership
Kristel Volver
- Chair - Appointed on 2 June 2021
Independent Non-Executive Director
Ed Williams
- Appointed on 2 June 2021
Independent Non-Executive Director
Jurgita Kirvaitienė
- Appointed on 17 May 2022
Independent Non-Executive Director
Both Kristel Volver and Jurgita Kirvaitienė fulfil the requirement
for a Committee member to have recent and relevant financial
experience. The biographies of each Committee member are
set out on pages 42 to 43 with specific skills referenced also
on page 42.
Auditors
The Group’s external auditor is KPMG
Deloitte is providing internal audit services
Key responsibilities
Financial reporting:
•
monitoring the integrity of the Group’s financial reporting and
the significant judgements contained therein; and
•
providing advice to the Board on whether the Annual Report,
taken as a whole, is fair, balanced and understandable.
Internal control and risk management:
•
reviewing effectiveness of the Company’s internal financial
controls and internal control and risk management systems.
Internal audit:
•
overseeing the Company’s internal audit activities; and
•
monitoring and reviewing the effectiveness of the internal
audit function.
External audit:
•
conducting the tender process and making recommendations
to the Board about the appointment, re-appointment and
removal of external auditor;
•
approving fees and terms of engagement of external auditor;
•
reviewing and monitoring external auditor’s independence
and objectivity;
•
reviewing the effectiveness of the external audit process; and
•
developing and implementing policy on the engagement of
the external auditor to supply non-audit services.
Main activities during the year
During the financial year ended 30 April 2024 the Committee
met five times and its key activities were:
•
reviewing the half year and annual financial statements and
reports, the significant financial reporting judgements and
estimates, and the use of Alternative Performance Measures;
•
assessing the Group’s going concern and viability statements;
•
reviewing the effectiveness of the external audit process and
the internal audit function;
•
reviewing the effectiveness of the Group’s risk management
and internal controls systems,
•
reviewing the Group’s systems and controls for prevention of
bribery;
•
approving Tax Compliance Policy;
•
receiving reports from internal auditors on internal audit
results and updates from management on implementation of
internal audit recommendations; and
•
approving internal audit charter and internal audit plan for the
coming year.
Planning for financial year ahead
•
continuing to monitor financial reporting; and
•
continuing to monitor and develop response to UK governance
changes
Dear Shareholders
I
am
pleased
to
present
the
Audit
Committee’s Report for the year ended 30
April 2024. This report provides a summary
of the Committee’s role and activities in
the year and sets out the work that the
Committee has performed in respect of
this Annual Report.
During the financial year ended 30 April
2024, there were five Audit Committee
meetings. All meetings were attended by
all three Committee members. The Group’s
external auditor, KPMG, attended all of the
Audit Committee meetings held during
the financial year. The rest of the Board
attended the meetings by invitation. The
external auditor has direct access to me
as the Audit Committee Chair to raise any
concerns outside of formal Committee
meetings. The Committee also periodically
sets time aside to seek the views of the
external auditor, without the presence of
management.
During the year the Committee continued
to
focus on the integrity of the Group’s
financial
reporting,
key
accounting
judgments and related disclosures as
well as the robustness of the Group’s
risk management and internal control
systems.
In the year ahead, the Committee will
continue to focus on ensuring the internal
control processes continue to operate
effectively
and
remain
appropriate.
The role of the Committee will assume
further significance in the light of the
requirements of the 2024 UK Corporate
Governance Code with regard to, among
other things, monitoring and review of the
Company’s risk management and internal
control framework.
The Committee has reviewed the content
in this Annual Report and considers
that it explains the Group’s strategy,
financial performance and position in a
way which we believe to be fair, balanced
and understandable. Whilst this Audit
Committee
Report
contains
some
of
the matters addressed during the year,
it should be read in conjunction with the
external auditor’s report on pages 71 to 76
and the financial statements in general.
At the 2024 AGM, Shareholders will vote on
the Board’s recommendation to re-appoint
KPMG as the Group’s external auditor.
I will be available at the 2024 AGM to
answer any questions.
Kristel Volver
Chair of the Audit Committee
2 July 2024
Financial reporting
The
Committee
is
responsible
for
reviewing the appropriateness of the
Group’s
half-year
report
and
annual
financial statements.
In the preparation of the Group’s financial
statements
for
2024,
the
Committee
assessed the accounting principles and
policies adopted, Alternative Performance
Measures used and whether management
had made appropriate estimates and
judgments. In doing so, the Committee
discussed
management
reports
and
enquired
into
judgments
made.
The
Committee reviewed the reports prepared
by the external auditor on the 2024 Annual
Report.
The
Committee,
together
with
management,
identified
the
following
areas of focus:
Area
Audit Committee action
Revenue recognition
As more fully described in note 6 to
the financial statements, the Group’s
revenue is derived from listing fees on
the Group’s platforms, advertising, and
financial intermediation services. There
are a number of different duration service
packages available for customers. In line
with IFRS 15, the Group recognises this
revenue over time based on service usage.
Revenue is an area of focus given its
high value in the financial statements,
however there is no critical estimation or
judgement involved. The Group’s revenue
is accounted over time based on service
usage.
The Committee reviewed the rationale
and the process implemented to account
for the revenue based on usage and
disclosure around revenue recognition
made by management.
The Committee was satisfied with the
explanations provided and conclusions
reached in relation to revenue recognition.
Recoverability of parent Company’s investment in subsidiaries
The
carrying
amount
of
the
parent
Company’s investment in its subsidiaries
represents a significant majority of the
Company’s total assets.
The investment is not considered at risk
of
material
misstatement
or
subject
to significant judgement, however it is
considered significant due to its size in
relation to the Company balance sheet.
The Committee reviewed the assumptions
made
by
management,
including
the
strong track record of profitable growth
and cash generation and was satisfied
with the assumptions made.
Going concern and viability statement
The Directors must satisfy themselves as
to the Group’s viability and confirm that
they have a reasonable expectation that
it will continue to operate and meet its
liabilities as they fall due. The period over
which the Directors have determined it is
appropriate to assess the prospects of the
Group has been defined as five years. In
addition, the Directors must consider if the
going concern assumption is appropriate.
In assessing the validity of the viability
and going concern statements detailed on
pages 40 and 82, the Committee reviewed
the work undertaken by management
to assess the Group’s resilience to the
principal risks set out on pages 38 to 39
under various stress test scenarios.
The
Committee
was
satisfied
that
sufficient rigour was built into the process
to assess going concern and viability over
the designated period.
Carrying amount of goodwill
The Group has a significant balance of
goodwill that arose during acquisitions
and it is considered to be a significant
estimate.
An
impairment
review
is
performed
of goodwill balances by management
on a ‘value in use’ basis. This requires
judgement in estimating the future cash
flows and the time period over which they
occur, arriving at an appropriate discount
rate to apply to the cash flows as well
as an appropriate long-term growth rate.
Each of these judgments has an impact on
the overall value of cash flows expected
and therefore the headroom between the
cash flows and carrying values of the cash
generating units.
The
Committee
has
reviewed
the
assumptions
made
and
judgments
applied by management and, after due
discussion, was content with the outcome
of the impairment review.
Audit Committee Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
58
59
Is the
report fair?
•
Is the whole story presented and has any sensitive material been
omitted that should have been included?
•
Are key messages in the narrative aligned with the KPIs and are
they reflected in the financial reporting?
Is the report
balanced?
•
Do you get the same messages when reading the front end and
back end of the Annual Report independently?
•
Are threats identified and appropriately highlighted?
•
Are the Alternative Performance Measures explained clearly with
appropriate prominence?
•
Are the key judgments referred to in the narrative reporting and
significant issues reported in this Committee Report consistent
with disclosures of key estimation uncertainties and critical
judgments set out in the financial statements?
•
How do these judgments compare with the risks that KPMG are
planning to include in their Auditor’s Report?
Is the report
understandable?
•
Is there a clear and cohesive framework for the Annual Report?
•
Are the important messages highlighted appropriately throughout
the Annual Report?
•
Is the Annual Report written in easy-to-understand language and
are the key messages clearly drawn out?
•
Is the Annual Report free of unnecessary clutter?
Conclusion
Following its review, the Committee is of the opinion that the Annual
Report, taken as a whole, is fair, balanced and understandable and
provides the information necessary for Shareholders to assess the
Group’s position, performance, business model and strategy
Audit Committee Report
continued
Fair, balanced and
understandable
At the request of the Board, the Committee
has reviewed the content of the Annual
Report and considered whether, taken
as a whole, it is fair, balanced and
understandable,
and
provides
the
information necessary for shareholders
to
assess
the
Company’s
position,
performance,
business
model
and
strategy. The Committee was provided
with a draft of the Annual Report and the
opportunity to comment where further
clarity or information should be added.
The final draft was then recommended
for approval by the Board. When forming
its opinion, the Committee had regard to
discussions held with management and
reports received from the external auditor.
Internal controls
The Committee’s responsibilities include
assisting the Board in its oversight of the
Company’s system of internal controls.
This includes:
•
reviewing annually the effectiveness
of the Group’s risk management and
internal control framework;
•
reviewing reports from the external
auditors on any issues identified in
the course of their work, including any
internal control reports received on
control weaknesses and ensuring that
there are appropriate responses from
management; and
•
reviewing reports from the Group’s
outsourced
internal
audit
function
and ensuring recommendations are
implemented where appropriate.
During
2024,
the
Audit
Committee
reviewed the Group’s risk management
and
internal
controls
systems
and
procedures for detecting fraud, including
related
policies.The
Committee
also
reviewed
the
reports
received
from
the external and internal auditors with
audit
findings
and
recommendations,
including management’s action plans as
well as received periodic updates from
management on the progress made in
addressing those recommendations.
Internal audit
Deloitte provides an outsourced internal
audit function to the Group. They are
accountable
to
the
Audit
Committee
and
use
a
risk-based
approach
to
provide independent assurance over the
adequacy and effectiveness of the control
environment.
During the year ended 30 April 2024 the
internal audit concentrated on the areas
of disaster recovery, taxation and GDPR.
No significant failings or weaknesses
were identified. However, it was noted that
in some cases the control environment
lacks formalisation. The Committee has
discussed the findings and management’s
action
plan
with
internal
auditors
and
management.
The
Committee
also received periodic updates on the
progress made in relation to internal
audit recommendations in the areas of IT
systems and revenue recognition which
were audited in the previous year.
The Committee reviewed an internal audit
plan for 2025 which will continue to cover
a range of core financial and operational
processes
and
controls,
focusing
on
specific risk areas.
The Committee is reviewing Deloitte’s
performance as internal auditor annually
with the last review having taken place in
February 2024 during which an opportunity
to further improve internal audit reports
format was identified.
External auditor
One of the Committee’s roles is to oversee
the relationship with the external auditor,
KPMG, and to evaluate the effectiveness
of the service provided and their ongoing
independence. The Committee received
and discussed KPMG’s audit report of the
financial statements for the financial year
ended 30 April 2024. The Committee Chair
met with representatives from KPMG
without management present and also
with management without representatives
of KPMG present, to ensure that there
were no issues in the relationship between
management and the external auditor to
be addressed. There were none.
The Committee places great importance
on ensuring that the external audit is
both high quality and effective. The
effectiveness of the external audit process
is dependent on several factors, including
the quality, continuity, experience and
training of audit personnel; understanding
of the business model, strategy and
risks; technical knowledge and degree of
rigour applied in the review processes of
the work undertaken; communication of
key accounting and audit judgements;
together
with
appropriate
audit
risk
identification at the start of the audit cycle.
Performance of the external auditor is
evaluated by the Committee on an annual
basis with the last review having taken
place in October 2023. The Committee
evaluated the effectiveness of the audit
process using a questionnaire, together
with
input
from
management.
Areas
considered in the review included the
quality of audit planning and execution,
engagement with the Committee and
management, quality of key audit reports
and the capability and experience of the
audit team. The Committee was satisfied
that there had been appropriate focus and
challenge on the primary areas of audit
risk and concluded that the performance
of KPMG remained efficient and effective
in its role.
The
Committee
is
also
responsible
for
ensuring
the
external
auditor
remains independent. In assessing the
independence of the auditors from the
Company,
the
Committee
takes
into
account the information and assurances
provided by the auditors. KPMG confirmed
during the year that its partner and staff
complied with its ethics and independence
policies
and
procedures
which
are
consistent with
the requirements of the
FRC Ethical Standard.
The recommendation to reappoint KPMG
beyond the financial year ending 30
April 2025 will depend on continuing
satisfactory performance.
Non-audit services provided by
the external auditor
The external auditor is primarily engaged
to carry out statutory audit work. There
may be other services where the external
auditor is considered to be the most
suitable supplier by reference to their
skills and experience. It is the Group’s
practice to seek quotes from more than
one firm, which may include KPMG, before
engagements for non-audit projects are
awarded. Contracts are awarded based on
individual merits.
A formal policy is in place for the provision
of non-audit services by the external
auditor to ensure that the provision of
such services does not impair the external
auditor’s independence or objectivity.
Statement of compliance: The Statutory
Audit
Services
for
Large
Companies
Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014
(the “CMA Order”)
KPMG was first appointed as statutory
auditor of Group’s top holding company
preceding Baltic Classifieds Group PLC for
the year ended 30 April 2020. KPMG was
contracted in 2021 to provide offering and
Admission related reporting accountant’s
services and following a competitive
tender process, was appointed as a
statutory auditor of the Company for the
year ended 30 April 2022. Kate Teal took
over the position as audit partner with
effect from the financial year 2022 and
remained the audit partner throughout
2024.
The Company confirms it complied with
the requirement that the external audit
contract is tendered within the 10 years
prescribed by UK legislation and the Code’s
recommendation. The Company confirms
that it complied with the provisions of the
CMA Order for the financial year under
review.
Kristel Volver
Chair of the Audit Committee
2 July 2024
Non-audit service
Policy
Permitted services not subject to cap
Reporting required by law or regulation or
where the authority/regulator specified
the
auditor
to
provide
the
service;
reporting on iXBRL tagging of financial
statements; other services where time is
critical and the nature of the service would
not compromise independence.
The Audit Committee assesses threats to
independence and the safeguards applied
in accordance with FRC’s Revised Ethical
Standard (2019) and approves all non-
audit services work which is not deemed
“trivial”.
Permitted services subject to cap
Audit related services, e.g. review of
interim financial information; reporting
on covenant or loan agreements and
government grants;
The Audit Committee assesses threats to
independence and the safeguards applied
in accordance with FRC’s Revised Ethical
Standard (2019) and approves all non-
audit services work which is not deemed
“trivial”.
A cap on the aggregate amount in any
financial year of 70% of the average audit
fees paid to the audit firm in the last three
consecutive years applies.
Prohibited services
In line with the FRC ethical standards,
these are services where the auditor’s
objectivity and independence may be
compromised. Prohibited services are
detailed
in
the
FRC
Revised
Ethical
Standards 2019 and include tax services,
accounting
services,
internal
audit
services
and
valuation
services
and
financial systems consultancy.
Prohibited, with the exception of certain
services which are subject to derogation
if certain conditions are met and will be
assessed going forward in line with the
new FRC Ethical and Auditing Standards.
No non-audit services were procured from KPMG during the financial year ended 30 April
2024.
Audit Committee Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
60
61
Directors’ Remuneration Report
Committee meeting attendance can be found on page 51.
Committee Terms of Reference can be found here:
balticclassifieds.com/corporate-governance.
We continue to monitor our remuneration
arrangements to ensure they remain aligned
with our strategy and are
simple and
transparent.
Ed Williams
Chair of the Remuneration Committee
“
Remuneration Committee membership
Ed Williams
- Chair - Appointed on 2 June 2021
Independent Non-Executive Director
Kristel Volver
- Appointed on 2 June 2021
Independent Non-Executive Director
Jurgita Kirvaitienė
- Appointed on 17 May 2022
Independent Non-Executive Director
Key responsibilities
•
Determines the policy for rewarding Directors and the rest
of the Senior Management (the “Remuneration Policy”) and
oversees how the Group implements the Remuneration
Policy.
•
Oversees
the
level
and
structure
of
remuneration
arrangements for Senior Management, approves share
incentive plans and recommends them to the Board and
Shareholders.
•
Reviews workforce remuneration and related policies with
the alignment of incentives and rewards with culture.
In 2021 Deloitte was appointed as a remuneration advisor.
Deloitte is a founding member of the Remuneration Consultants
Group and adheres to its Code in relation to executive
remuneration consulting in the UK. The Committee is satisfied
that the Deloitte engagement team, which provided remuneration
advice to the Committee, does not have connections with
Baltic Classifieds Group PLC or its Directors. The Committee is
satisfied that the advice received is objective, independent and
free of undue influence. Deloitte’s fees are charged on a time
and materials basis. During the year, there were €4,094 fees
incurred (€8,234 in 2023) for advice provided by Deloitte to the
Committee. Deloitte also provides Internal Audit services (see
Audit Committee Report).
Dear Shareholders
On behalf of the Board, I am pleased to present the Directors’
Remuneration report for the financial year ended 30 April 2024.
The Directors’ Remuneration report comprises two sections:
Part 1:
Annual statement: this statement being my annual
report on the activities of the Remuneration Committee
during the year; and
Part 2:
Annual Remuneration Report: which explains how the
Directors have been rewarded during the financial year
ended 30 April 2024 and any other matters not covered
in the previous part.
It will be subject to an advisory vote
at the 2024 AGM.
Remuneration compliance
This report complies with Schedule 8 of the Large and
Medium-sized Companies and Group (Accounts and Reports)
Regulations, the 2018 UK Corporate Governance Code and the
Listing Rules.
•
In line with the FRC UK Corporate Governance Code 2018 (the
“Code”), all three members of the Committee have relevant
business experience.
•
The Chair of the Committee has previous experience chairing
the Remuneration Committee of another (at the time) FTSE 250
business and has attended dozens of Remuneration Committee
meetings in his capacities as CEO of Rightmove PLC and Chair of
Autotrader PLC.
•
Board Chair, Executive Directors, Tom Hall (Non-Executive
Director) and third-party remuneration consultants attend
meetings by invitation.
•
No individual takes part in any decision relating to their own
remuneration.
Part 1: Annual Statement
Base salary
•
Originally set (in 2021) as lower quartile of non-financial companies
ranked 251 to 350 in the FTSE350, adjusted downward to reflect the
difference in purchasing power in Lithuania as compared to the UK
•
Phasing in of this base salary starting from approximately 70% of
the target base salary at IPO and increasing in four equal annual
increments to reach the target salary by 2026
•
Expectation of annual increases to base salary no higher than
the average basic pay rise for employees (likely to be significantly
higher than among UK-based companies, as Baltic standards of
living converge on the average across the EU), plus the phasing in
as described above
Pensions
•
The Company does not operate a pension scheme
Other benefits
•
Other benefits are minimal and available on an equal basis to all
employees
Annual bonus
•
The Company does not operate an annual bonus scheme
Long Term
Incentive Plan
(LTIP)
•
Performance Share Plan. The executives each year will receive
awards of €700,000 for the CEO, €500,000 for the COO and €300,000
for the CFO, though awards may be made of up to 200% of the target
base salary
•
Vesting of awards is subject to the achievement of EPS targets
announced at grant
•
Scheme is designed to ensure the particular approach to capital
return does not affect the outcome for executives
•
Shares required to be held for a further two years from the first date
of vesting.
Shareholdings,
employment
contracts, malus
and clawback
•
The CEO is required to hold €1.0m and the other Executive Directors
€0.5m worth of shares, with half of any vested shares needing to be
retained by the executives should they be below this level
•
Conform to all governance requirements and best practice
As Chair of the Remuneration Committee
and on behalf of the Board, I am pleased
to
present
our
report
on
Directors’
remuneration for the financial year ended
30 April 2024.
The Directors’ Remuneration Policy was
supported by 97.77% of our shareholders
at our AGM in 2022. We take this as support
for key aspects of the policy including pay
set to reflect the local market norms, the
absence of an annual bonus, incentives
aligned to shareholders through the LTIP,
alignment of benefits with the wider
workforce, best practice in relation to
malfeasance, clawbacks, termination of
employment etc. An overview of the policy
is set out in the summary on the right.
Our work during 2024 has been the
consistent implementation of the policy
rather than making changes or exercising
discretion. The most notable aspects of
this have been (i) deciding an appropriate
increase to base salaries for the Chair and
Executive Directors in the context of lower
local pay but significantly higher local
market pay rises and inflation (ii) setting
the quantum of the performance required
to achieve any or all of the LTIP. These are
discussed below.
Pay and performance outcome
in 2024
Total remuneration
The
Committee
believes
that
BCG
continues to be well served by its simple,
transparent and objective remuneration
arrangements established at the IPO in
2021.
Setting
remuneration
in
general,
and
performance targets in particular, has been
challenging in many businesses in recent
years. Fortunately, our policy, including
choice of performance targets, has stood
up well. As a result, during the last year,
the Remuneration Committee has seen no
reason to change its policy in any regard
nor to exercise discretion in relation
to past awards or any other historic
aspects of remuneration. All changes to
remuneration for 2024 and 2025 therefore
reflect the simple application of our policy
as approved by shareholders in 2022 AMG.
Long Term Incentive Plan (LTIP)
The first The Long Term Incentive Plan
(LTIP) awards were granted in 2021 and will
vest in July 2024 based on performance in
the year ended 30 April 2024. The awards
were based 100% on Earnings per share
(EPS). EPS in 2024 was above 5.0 € cents
(the maximum target set), therefore 100%
of LTIP awards will vest and will be subject
to a two-year holding period.
The Committee reviewed the incentive
outcomes in the context of wider Group
performance, the shareholder and wider
Remuneration Policy summary
stakeholder
experience
(including
our
employees) and considers that these
incentive outcomes are a fair reflection of
the Group’s performance and therefore no
discretion has been applied.
Annual bonus
The company does not operate an annual
bonus scheme.
Key remuneration decisions
Annual base salary review for 2025
Average
pay
rises
within
the
Group
(excluding the Directors) were 10% in
2024. Given the wage inflation in the
Baltics remains high, a similar pay rise
is planned for a considerable majority of
employees in 2025 as well.
The base salary or fee for each Director
was increased by 9% from 1 May 2024,
aligning with the average salary increase
across the business. It is high by UK
standards, reflecting the much higher
level of wage inflation in Lithuania (all
Director salaries and fees are based on
the considerably lower rates of pay in
Lithuania as compared to the UK).
In
addition,
Executive
Director
remuneration
increased
according
to
the formula set out in the Remuneration
Policy as part of a planned, progress five-
year unwinding of the salary discount of
the previous private company as we move
to normal, though modest, levels of public
company
salaries
(see
Remuneration
Policy summary above).
Share awards and performance
conditions
Awards to Executive Directors for 2024 and
planned for 2025 were made at the levels
indicated in the Company’s Remuneration
Policy. Performance was and will continue
in 2025 to be based on EPS
1
metrics (see
Remuneration Policy summary above or
page 91 of the 2022 Annual Report for full
details).
In setting the targets the Remuneration
Committee took the view that, particularly
at the top end, they should be more
demanding as compared to the three-year
business forecasts, than those set in our
first three years as a public company.
Outside the Executive Directors, awards
under the LTIP awards are generally made
to Senior Management and other key
personnel who have not benefited from the
scheme in the previous year, with a view to
achieving relatively widespread employee
involvement
but
keeping
the
dilution
impact on shareholders modest. Based
on this decision and the performance of
1
Subject to the Remuneration Committee applying discretion for M&A and other impacts as determined by the Committee.
Directors’ Remuneration Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
62
63
the business against targets over the last
three years, we now have a significant
group of executives and key personnel
who can have a reasonable expectation
that their awards under previous LTIPs
will be of value, with the first group able
to realise those potential benefits in 2024
and the Executive Directors from 2026.
Hence we believe that the LTIP is achieving
the retention objectives for which it was, in
part, designed.
Remuneration outside the
Directors
The Remuneration Committee reviewed
the CEO’s list of proposed members of the
LTIP and the levels of individual awards.
The
Committee
also
reviewed
senior
management remuneration generally, for
internal consistency, and the remuneration
arrangements
in
relation
to
recently
acquired employees.
Non-Executive Director fees
The Board, excluding the Non-Executive
Directors, undertook a review of non-
executive fees during the year. It was
agreed that fees for the non-executive
director should be increased by the
same base percentage as for Executive
Directors and the Chair (though excluding
any increases relating to the five-year
transition
of
Executive
Director
base
salaries referenced above).
Though restricting the increase in Non-
Executive (and Chair) fees to the same
percentage as received by the Executive
Directors, it was noted that these fees were
unusually low for a company of the size
and value of BCG, even having adjusted
for lower remuneration in Lithuania.
It had
also arisen as a question when seeking
new board members (see Nomination
Committee Report).
It was agreed that
this would be reviewed in the coming
year as part of our three-yearly review of
Remuneration Policy.
2024 AGM
The Committee has continued to be
mindful
of
the
requirements
of
the
UK Corporate Governance Code when
developing and applying remuneration
policy. The Committee believes the current
policy serves the interests of the Company
and shareholders well and looks forward
to receiving your support at the 2024 AGM
for this remuneration report.
I would like to thank my fellow Committee
members
for
their
commitment
and
contribution.
Ed Williams
Chair of the Remuneration Committee
2 July 2024
Part 2: Annual Remuneration Report
The Remuneration Committee presents
the Annual Remuneration Report, which
together with the Chair’s introduction on
pages 60 to 61, will be put to shareholders
for an advisory (non-binding) vote at the
AGM to be held on 27 September 2024.
Sections which have been subject to audit
are noted accordingly.
Summary of approach to executive remuneration
Component of pay
Implementation for 2024
Implementation for 2025
Base
salaries
•
CEO: €363,000
•
CFO: €217,800
•
COO: €290,400
•
CEO: €428,643
•
CFO: €257,186
•
COO: €342,914
PSP
•
In 2024 the Executives were awarded the below
values of three-year nominal cost share options
each:
•
CEO: €700,000
•
CFO: €300,000
•
COO: €500,000
•
Performance will be measured based on EPS
1
for 2026 of 9.5 € cents for 25% to vest and then
straight line to 12.0 € cents for 100% to vest
•
In 2025 the Executives will be awarded the below
values of three-year nominal cost share options
each:
•
CEO: €700,000
•
CFO: €300,000
•
COO: €500,000
•
Performance will be measured based on EPS
1
for 2027 of 12.5 € cents for 25% to vest and then
straight line to 15.5 € cents for 100% to vest
NED fees
•
Chair fee: €145,200
•
Non-Executive Director base fee: €36,300
•
Senior Independent Director: €3,025
•
Audit and Remuneration Committee Chairs:
€9,075
•
Chair fee: €158,268
•
Non-Executive Director base fee: €39,567
•
Senior Independent Director: €3,297
•
Audit and Remuneration Committee Chairs:
€9,892
As a consequence, the future base salaries for Executive Directors as they transition to public company levels, will further be in-
creased by 9% for the year 2026 and may be subject to further market adjustment.
1
Subject to the Remuneration Committee applying discretion for M&A and other impacts as determined by the Committee.
Migration route to standard
FY2022
(€ thousands)
FY2023
(€ thousands)
FY2024
(€ thousands)
FY2025
(€ thousands)
FY2026
(€ thousands)
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
Salary
LTIP
Max
rem
CEO
250
700
950
303
700
1,003
363
700
1,063
429
700
1,129
462
700
1,162
CFO
150
300
450
182
300
482
218
300
518
257
300
557
277
300
577
COO
200
500
700
242
500
742
290
500
790
343
500
843
369
500
869
Single total figure for remuneration (audited)
The remuneration of the Directors of the Company during the financial year ended 30 April 2024 for time served as a Director is as
follows:
Base salary
and fees
(€ thousands)
PSP
1
(€ thousands)
Total
remuneration
(€ thousands)
Total fixed
remuneration
(€ thousands)
Total variable
remuneration
(€ thousands)
Executive
Directors
Justinas Šimkus
361
987
1,348
361
987
Lina Mačienė
216
423
639
216
423
Simonas Orkinas
291
705
996
291
705
Non-Executive
Directors
Trevor Mather
145
-
145
145
-
Ed Williams
48
-
48
48
-
Kristel Volver
45
-
45
45
-
Tom Hall
-
-
-
-
-
Jurgita Kirvaitienė
36
-
36
36
-
The remuneration of the Directors of the Company during the financial year ended 30 April 2023 for time served as a Director was as
follows:
Base salary
and fees
(€ thousands)
PSP
(€ thousands)
Total
remuneration
(€ thousands)
Total fixed
remuneration
2
(€ thousands)
Total variable
remuneration
(€ thousands)
Executive
Directors
Justinas Šimkus
301
-
301
301
-
Lina Mačienė
181
-
181
181
-
Simonas Orkinas
241
-
241
241
-
Non-Executive
Directors
Trevor Mather
132
-
132
132
-
Ed Williams
44
-
44
44
-
Kristel Volver
41
-
41
41
-
Tom Hall
-
-
-
-
Jurgita Kirvaitienė
32
-
32
32
-
PSP awards during the year (audited)
Nominal cost share options granted in the year under the PSP scheme are shown below.
Date of grant
No. of
shares
granted
Share price
used
2
(€)
Face value of
award
3
(€ thousands)
Multiple
of salary
% award
vesting
at threshold
(% maximum)
Performance period
4
CEO
5 July 2023
370,520
1.89
700
193%
25%
1 May 2023 - 30 April 2026
CFO
5 July 2023
158,794
1.89
300
138%
25%
1 May 2023 - 30 April 2026
COO
5 July 2023
264,657
1.89
500
172%
25%
1 May 2023 - 30 April 2026
1
100% of PSP 2021 will vest in July 2024 for a performance period ending 30 April 2024. For the purpose of the single figure, the value of the PSP is based on the average share
price for the three months ending 30 April 2024 of £2.32 / €2.72. No amount of the PSP value disclosed in the single figure table above is attributable to share price appreciation.
2
A 3-month average share price of £ 1.64 / € 1.89 was used
3
Awards are determined based on a fixed monetary value
4
PSP awards will normally be eligible to vest three years from grant (5 July 2026) based on performance over the three years to 30 April 2026 and continued employment.
Performance targets starting at EPS for 2026 of 9.5 € cents per share for 25% of the award and then in a straight line to 12.0 € cents per share for 100% vesting.
Pay and benefits
The Committee has implemented the
Remuneration Policy in accordance with
the policy approved by shareholders at
the AGM on 28 September 2022. The table
below sets out the way the policy was
implemented in 2024 and any material
changes in the way it will be implemented
in 2025.
The Remuneration Committee reviewed
the base salaries for Executive Directors
and the fees for the Chair with regard to
2025. The most recent wage inflation in
Lithuania at the time of the review was
12.2% (July-September 2023) compared to
the same period in 2022 as the Lithuanian
Department of Statistics only issues
average wage inflation measures every
three months.
The considerable majority of employees in
the business will receive a pay rise of at
least 9% for 2025.
The Remuneration Committee agreed to
a 9% pay rise for Executive Directors on
top of the phased increase in base salary
explained previously. The Remuneration
Committee also agreed to a 9% pay rise for
the Chair. The Board proposed and agreed
a 9% increase in all fees for Non-Executive
Directors.
Directors’ Remuneration Report
continued
Directors’ Remuneration Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
64
65
TSR performance
The
graph
above
shows
the
TSR
performance of the Company for the
financial year ended on 30 April 2024,
against the FTSE All-Share index. This
peer group was selected as it represents
a broad equity market index, of which
the Company is a constituent. The TSR
graph shows the growth in the value of a
hypothetical holding of £100 invested on
30 June 2021 and will be updated yearly
with the intention to build up to a 10-year
rolling period in future annual reports.
CEO remuneration
The
following
table
summarises
the
CEO single figure. This table outlines the
proportion of PSP awards vesting in that
year as a percentage of the maximum
opportunity. Like the TSR chart, this table
will be updated annually to build up to a
10-year rolling period.
CEO single figure
2024
2023
2022
2
CEO total remuneration
(€ thousands)
1,348
301
220
PSP vesting (% of
maximum)
1
100%
-
-
Percentage change in the
remuneration
The table below sets out the percentage
change in the remuneration of all the
Directors of the Company compared with
the average of all employees between 2023
and 2024, based on the figures shown in
the single total figure for remuneration
tables above.
Change in salary and fees (%)
2024-
2023
2023-
2022
5
Executive
Directors
Justinas Šimkus
20%
37%
Lina Mačienė
19%
19%
Simonas Orkinas
20%
32%
Non-
Executive
Directors
Trevor Mather
10%
34%
Ed Williams
10%
34%
Kristel Volver
10%
34%
Tom Hall
3
n/a
n/a
Jurgita Kirvaitienė
4
15%
n/a
Average employee
10%
12%
Relative importance of spend on
pay
The following table shows the Group’s
actual spend on pay for all employees
compared to distributions to shareholders.
The average number of full time equivalent
employees has also been included for
context. Revenue and EBITDA have also
been disclosed as these are two key
measures of Group performance.
2024
2023 Change
(€ thousands)
%
Employee costs (refer to
note 8 to the consolidated
financial statements)
11,012 9,327
18%
Dividends paid to
shareholders (refer to note
18 to the consolidated
financial statements)
13,252 10,918
21%
Purchase of own shares
(refer to note 17 to the
consolidated financial
statements)
19,442
5,775
237%
Average number of full
time equivalent employees
(refer to note 8 to the
consolidated financial
statements)
136
131
4%
Revenue (refer to
Consolidated statement
of profit or loss and other
comprehensive income)
72,067 60,814
19%
EBITDA (refer to note 4 to
the consolidated financial
statements)
55,255 46,045
20%
CEO pay ratio
The Company has less than 250 employees
in the UK and therefore is not required to
disclose the CEO pay ratio.
Pension entitlements
The Company does not operate a pension
scheme.
Executive Directors’ service
contracts
The details of each Executive Director’
service contract are noted in the following
table:
Date of service
contract
Notice period
Justinas Šimkus
3 June 2021
12 months
Lina Mačienė
3 June 2021
6 months
Simonas Orkinas
3 June 2021
6 months
Non-Executive Directors’ terms
of appointment
The date of appointment and the length
of service for each NED are shown in the
following table:
Date of
appointment
Length of
service as at
2024 AGM
Trevor Mather
2 June 2021
3 year
Ed Williams
2 June 2021
3 year
Kristel Volver
2 June 2021
3 year
Tom Hall
2 June 2021
3 year
Jurgita Kirvaitienė
17 May 2022
2 year
Payments for loss of office and/
or payments to former Directors
(audited)
No payments for loss of office, nor
payments to former Directors were made
during 2024 or 2023.
Executive Directors’ external
appointments
External appointments are listed on pages
42 to 43.
Voting outcomes at AGMs
The table below shows full details of
the voting outcomes for the Directors’
Remuneration
Report
and
the
Remuneration Policy:
2023 AGM:
Directors’
Remuneration
Report (advisory)
2022 AGM:
Remuneration
Policy (binding)
Votes for
460,504,853
289,702,212
% Votes for
98.00
97.77
Votes against
9,384,713
6,618,726
% Votes against
2.00
2.23
Votes withheld
6
851,768
1,354,304
The Remuneration Policy is unchanged
from that appearing on pages 79 to 94 of
our 2022 Annual Report.
A shareholder vote on Remuneration
Policy is not required in 2024 AGM.
On behalf of the Board
Ed Williams
Chair of the Remuneration Committee
2 July 2024
Share options under PSP held by the Executive Directors and not exercised as at 30 April 2024 (audited)
Date granted
PSP awards
held as at 30
April 2023
Granted
Exercise
price
(£)
PSP awards
held as at 30
April 2024
Vesting date
Expiry date
Justinas Šimkus
PSP 2021
27 July 2021
364,611
-
0.01
364,611
27 July 2024
27 July 2031
PSP 2022
12 July 2022
427,557
-
0.01
427,557
12 July 2025
12 July 2032
PSP 2023
5 July 2023
-
370,520
0.01
370,520
5 July 2026
5 July 2033
Total:
792,168
370,520
1,162,688
Lina Mačienė
PSP 2021
27 July 2021
156,262
-
0.01
156,262
27 July 2024
27 July 2031
PSP 2022
12 July 2022
183,239
-
0.01
183,239
12 July 2025
12 July 2032
PSP 2023
5 July 2023
-
158,794
0.01
158,794
5 July 2026
5 July 2033
Total:
339,501
158,794
498,295
Simonas Orkinas
PSP 2021
27 July 2021
260,436
-
0.01
260,436
27 July 2024
27 July 2031
PSP 2022
12 July 2022
305,398
-
0.01
305,398
12 July 2025
12 July 2032
PSP 2023
5 July 2023
-
264,657
0.01
264,657
5 July 2026
5 July 2033
Total:
565,834
264,657
830,491
All the above PSP awards have a three-
year service condition attached and a
performance condition that is based on
EPS measure:
•
PSP 2021: performance target period 1
May 2023 - 30 April 2024 with a target of
4 € cents per share for 25% of the award
and then in a straight line to 5 € cents
per share for 100% vesting;
•
PSP 2022: performance target period 1
May 2024 - 30 April 2025 with a target
of 7.5 € cents per share for 25% of the
award and then in a straight line to 8.5
€ cents per share for 100% vesting; and
•
PSP 2023: performance target period 1
May 2025 - 30 April 2026 with a target
of 9.5 € cents per share for 25% of the
award and then in a straight line to 12.0
€ cents per share for 100% vesting.
Given that the first PSP awards have not
yet vested, none of the above awards have
been exercised or have expired.
Beneficially
owned shares
1
Number
of awards held
under the PSP
conditional on
performance
Number
of vested but
unexercised
nominal cost
options
Target
shareholding
guideline
(€ m)
Shareholding
value
2
(€ m)
Executive
Directors
Justinas Šimkus
16,000,000
1,162,688
-
1.0
43.6
Lina Mačienė
1,940,128
498,295
-
0.5
5.3
Simonas Orkinas
2,500,000
830,491
-
0.5
6.8
Non-Executive
Directors
Trevor Mather
5,081,418
-
-
-
13.8
Ed Williams
4,910,936
-
-
-
13.4
Kristel Volver
515,151
-
-
-
1.4
Tom Hall
-
-
-
-
-
Jurgita Kirvaitienė
-
-
-
-
-
1
The first PSP award will vest in July 2024 and is based on performance in the period ended 30 April 2024. No PSP awards vested during 2023 and 2022.
2
2022 was a transition year for the Group as it moved from being a private company to a public listed company. The 2022 remuneration figure includes lower remuneration in the
first two months of 2022 prior to IPO.
3
Tom Hall’s directorship is unpaid.
4
Jurgita Kirvaitienė started her directorship in 2023 (17 May 2022).
5
2022 was a transition year for the Group as it moved from being a private company to a public listed company. The percentage changes set out above are partly as a result of lower
remuneration (nil in the case of non-executive directors) in the first two months of 2022 prior to IPO. Change in remuneration based on annualised emoluments after IPO was 21% for
Executive Directors and 10% for Non-executive Directors.
6
A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast ‘For’ and ‘Against’ a resolution.
1
Includes shares owned by connected persons. Only beneficially owned shares count towards the shareholding guideline. There have been no changes in share ownership between
1 May 2024 and 2 July 2024.
2
Based on the share price at close of business on 30 April 2024 of £2.32 / €2.72; multiplied by the number of beneficially owned shares.
Dilution of share capital by
employee share plans
All existing PSP awards can be satisfied
from shares held in the Baltic Classifieds
Group PLC’s Employee Benefit Trust (EBT).
It is intended that the 2024 PSP awards
will also be settled from shares planned
to be purchased into the EBT without any
requirement to issue further shares.
Share interests (audited)
Executive
Directors
are
required
to
maintain a certain minimum level of
shareholding in the Company: €1 million
for the CEO and €0.5 million for other
Executive Directors. In relation to existing
Executive Directors, the minimum value
of shareholding acts as a restriction on
selling shares to the extent that doing so
would cause the shareholding to fall below
the minimum shareholding guideline. All
existing Executive Directors meet their
shareholding guideline. In the event of the
appointment of a new Executive Director
with no shares or fewer shares than the
minimum shareholding guideline applied
to them, they will be expected to retain at
least half of any award of shares made to
them by the Company that vest until the
guideline is met. Non-Executive Directors
do not have shareholding guidelines.
Awards held under the PSP are subject to
a holding period of two years after vesting.
The following table sets out the number of
shares held or potentially held by Directors
(including their connected persons where
relevant) as at 30 April 2024.
£ value of £100 invested
at 30 June 2021
Apr
2024
Apr
2023
Apr
2022
Jan
2024
Jan
2023
Jan
2022
Oct
2023
Oct
2022
Oct
2021
Jul
2023
Jul
2022
Jul
2021
60
30
90
120
150
Baltic Classifieds Group PLC
FTSE All Share
Directors’ Remuneration Report
continued
Directors’ Remuneration Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
66
67
The Directors of Baltic Classifieds Group
PLC present their report, together with the
audited accounts for the year ended 30
April 2024.
Directors’ Report disclosures
As permitted by Section 414C(11) of
the Companies Act 2006, some matters
required to be included in the Directors’
Report in accordance with the Companies
Act 2006 , Listing Rule 9.8.4R of the
Financial
Conduct
Authority’s
Listing
Rules and the Large and Medium sized
Companies and Groups (Accounts and
Report) Regulations 2008 (as amended
in 2013), have instead been included
elsewhere in this Annual Report. These
matters are cross referenced in the
following table and are incorporated by
reference into this Directors’ Report:
Information required by
Disclosure Guidance and
Transparency Rule 4.1.5 R(2) and
4.1.8
The Strategic Report and the Directors’
Report
(or
parts
thereof),
together
with sections of this Annual Report
incorporated
by
reference,
are
the
“Management Report” for the purposes of
DTR 4.1.8.
The Directors are required under the
Companies Act 2006 to prepare a Strategic
Report for the Company and Group. The
Strategic Report contains the Directors’
explanation of the basis on which the
Group preserves and creates value over
the longer term and the strategy for
delivering the objectives of the Group.
The Companies Act 2006 requires that the
Strategic Report:
•
contain a fair review of the Group’s
business and contain a description of
the principal risks and uncertainties
facing the Group; and
•
be a balanced and comprehensive
analysis
of
the
development
and
performance of the Group’s business
during
the
financial
year
and
the
position of the Group’s business at the
end of that year, consistent with the
size and complexity of the business.
The information that fulfils the strategic
report requirements is set out in the
Strategic Report on pages 2 to 40.
The
Non-financial
and
sustainability
information statement on page 36 forms
part of the Strategic Report.
The Strategic Report and the Directors’
Report, together with the sections of this
Annual Report incorporated by reference,
have been drawn up and presented in
accordance with and in reliance upon
applicable English company law and the
Directors’ Report
Topic
Section of the report
Page
Fair review of the Company’s business
Directors’ report: Director confirmations
70
Principal risks and uncertainties
Risk Management: Principal risks and
uncertainties
38
Strategy
Strategic Highlights
Chair’s Statement
CEO Statement
Our Business at a Glance: Strategy
Moving our Strategy Forward
2
4
6
10
13
Business Model
Market Overview
Our Business at a Glance
7
10
Gender Breakdown:
•
directors of the company
•
senior managers
•
employees of the company
Nomination Committee Report: Inclusion and
diversity
Directors’ Report: Diversity of the Board and
Executive Management
Sustainability Report: People and Culture:
Diversity and inclusion and Social targets
Cultural Highlights
54
67
30
34
3
Important events impacting the business
Operational Review
Financial Review
20
16
Likely future developments
CEO Statement
Moving our Strategy Forward
6
13
Financial key performance indicators
Financial Review
16
Non-financial key performance indicators
Strategic Highlights
Our Business at a Glance
Sustainability Report
2
10
22
Financial instruments and financial risk
management
Notes to the Consolidated Financial Statements
81
Environmental matters
Sustainability Report
22
Employees with disabilities
Sustainability Report: Diversity and inclusion
30
Employee engagement
Strategic report: Section 172(1) Statement
Sustainability Report - Employee engagement
and wellbeing
Corporate Governance Report: Stakeholder
engagement
21
31
47
Social, community and human rights issues
Sustainability Report
22
Natural Resources
Sustainability Report
22
Board activity and culture
Corporate Governance Report: Board Leadership
and Company Purpose
Board priorities, key actions and principal
decisions
46
49
Board diversity
Nomination Committee Report: Inclusion and
Diversity
Directors’ Report: Diversity of the Board and
Executive Management
54
67
Directors' induction and training
Board priorities, key actions and principal
decisions
Corporate Governance report: Board
composition, succession and evaluation: Board
training and professional development
49
52
Topic
Section of the report
Page
Information required by Listing Rules 9.8.4(R)
Directors’ interests in Shares
Directors’ Remuneration Report
64
Going concern and viability statements
Strategic Report
40
Long-term incentive schemes
Directors’ Remuneration Report
60
Information required by Listing Rules 9.8.6R(8)
Climate-related disclosures
The Task Force for Climate-Related Financial
Disclosure Report
24
Information required by Disclosure Guidance and Transparency Rule 7.2
Corporate Governance Statement 2024
Corporate Governance Report
44
liabilities of the Directors in connection
with that report shall be subject to the
limitations and restrictions provided by
such law.
Information required by
Disclosure Guidance and
Transparency Rule DTR 7.2.8A
The Board updated and approved its Board
Diversity Policy in December 2023. The
main objectives are, that:
1. The Board composition is sufficiently
diverse and reflects an appropriate balance
of
skills,
knowledge,
independence
and experience to enable it to meet its
responsibilities and duties and strategic
objectives effectively.
2. Both appointments and succession
plans are based on merit and objective
criteria and, within this context, should
promote
diversity
of
gender,
social
and ethnic backgrounds, nationalities,
cognitive and personal strengths.
3. The Board supports workforce initiatives
that promote a culture of inclusion and
diversity.
4. The Board supports the Committee
in
identifying
women
and
other
underrepresented groups for promotion
into senior management roles.
5. The Board supports the board diversity
targets recommended by the FTSE Women
Leaders Review on gender diversity. These
recommendations are reflected in the
Board’s current targets:
•
At least 40% directors to be women;
and
•
At least one senior position to be held
by a woman - Chair, CEO, CFO, or Senior
Independent Director.
Diversity of the Board and
Executive Management* under
Listing Rule LR 9.8.6R(10)
The following data was obtained by asking
the Board and Executive Management
targeted questions relating to gender and
ethnicity.
Each individual was asked the same
questions and was asked to identify
which category applied to them from
‘Table a) Gender’ and from ‘Table b) Ethnic
background’ on the right.
For more information on the Company
and diversity targets, see the Nomination
Committee report on page 54.
The Board is satisfied that it has the
appropriate range of skills, experience,
independence, and knowledge of the
Group to enable it to effectively discharge
its duties and responsibilities.
Figures above taken as at 30 April 2024
Percentage of voting
right attached to Ordinary
Shares of £0.01
Nature of
holding
Date of notification of
interest
Antler EquityCo S.à.r.l.
26.559406
Direct
11 March 2024
Blacksheep Master Fund Ltd.
5.055000
Direct
7 March 2024
Justinas Šimkus
3.245930
Direct
14 December 2023
Kayne Anderson Rudnick
Investment Management, LLC
10.054190
Direct
29 June 2023
Percentage of voting
right attached to Ordinary
Shares of £0.01
Nature of
holding
Date of notification of
interest
Antler EquityCo S.à.r.l.
12.923982
Direct
5 June 2024
The Capital Group Companies,
Inc
5.334344
Indirect
4 June 2024
Blacksheep Master Fund Ltd.
6.290000
Direct
13 May 2024
These figures represent the number of shares and percentage held as at the date of
notification to the Company.
The following notifications have been received between 30 April 2024 and 27 June 2024.
No of Board
members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
Number in
Executive
management
1
Percentage
of Executive
Management
1
Gender
Men
5
62.5
3
2
50
Women
3
37.5
1
2
50
Not specified/prefer not to say
0
0
0
0
0
Ethnic background
White British or other White
(including minority-white groups)
8
100
4
4
100
Mixed/Multiple Ethnic Groups
0
0
0
0
0
Asian/Asian British
0
0
0
0
0
Black/African/Caribbean/Black
British
0
0
0
0
0
Other ethnic group, including
Arab
0
0
0
0
0
Not specified/ prefer not to say
0
0
0
0
0
Corporate governance
arrangements
During the financial year ended 30 April
2024, we have applied the principles of
good governance contained in the UK
Corporate Governance Code 2018 (the
“Code”). Our Compliance Statement for
this financial year 2024 is on page 44.
Further details on how we have applied
the Code can be found in the Corporate
Governance Report on pages 44 to 45.
Results and dividends
The financial statements set out the
results of the Group for the financial year
ended 30 April 2024 and are shown on
pages 77 to 112.
The Company declared an interim dividend
on 6 December 2023 of 1.0 € cents per
Ordinary Share which was paid on 24
January 2024. The Directors recommend
a final dividend of 2.1 € cents per Ordinary
Share, bringing the total dividend per
Ordinary Share to 3.1 € cents for the year
ended 30 April 2024. Subject to approval
at the 2024 AGM, the final dividend,
approximating €10.2 million, will be paid
on 18 October 2024 to shareholders on
the register of members on 13 September
2024.
Board of Directors
Details of the Directors of the Company
who were in office during the year under
review are set out on pages 42 to 43.
Substantial interests in shares
As at 30 April 2024, the table below shows
the holdings in the Company’s issued
share capital which had been notified to
the Company pursuant to the Financial
Conduct Authority’s Disclosure Guidance
and Transparency Rules.
The information below was correct at the
date of notification. It should be noted that
these holdings may have changed since
the Company was notified.
1
Executive management is defined here as the three Executive Directors and the Company Secretary.
Directors’ Report
continued
GOVERNANCE REPORT
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
68
69
Powers of the Directors
Subject to the Company’s Articles of
Association (the “Articles”), the Companies
Act 2006 and any special resolution of the
Company, the business of the Company
is managed by the Board, who may
exercise all the powers of the Company. In
particular, the Board may exercise all the
powers of the Company to borrow money,
to guarantee, to indemnify, to mortgage or
charge any of its undertakings, property,
assets and uncalled capital and to issue
debentures
and
other
securities
and
to give security for any debt, liability or
obligation of the Company or of any third
party.
Appointment and replacement of
Directors
The appointment and replacement of
Directors is governed by the Articles, the
Code, the Companies Act 2006 and related
legislation.
Directors may be appointed by ordinary
resolution of the Shareholders, or by
the Board. Appointment of a Director
from
outside
the
Group
is
on
the
recommendation
of
the
Nomination
Committee, whilst internal promotion is
a matter decided by the Board unless
it
is
considered
appropriate
for
a
recommendation to be requested by the
Nomination Committee.
Pursuant to the Relationship Agreement,
the Major Shareholder will be able to
appoint one Non-Executive Director to
the Board for so long as it (together with
any of its Associates) holds voting rights
over 10% or more of the Company’s issued
share capital. The Major Shareholder will
consult in advance with the Nomination
Committee regarding the identity of any
individual proposed to be nominated by it
as a Director. The Major Shareholder’s first
appointed representative Director is Tom
Hall.
A Director appointed by the Board holds
office only until the next annual general
meeting of the Company and is then
eligible for reappointment. At every annual
general meeting of the Company, each
Director shall retire from office and may
offer himself or herself for reappointment
by the members.
The Company may, by special resolution,
remove any Director before the expiration
of their period of office.
The office of a Director shall be vacated
if: (i) they resign; (ii) their resignation is
requested by all of the other Directors (not
fewer than three in number); (iii) they have
been suffering from mental or physical ill
health and the Board resolves that their
office be vacated; (iv) they are absent
without the permission of the Board from
meetings of the Board (whether or not an
alternative Director appointed by them
attends) for six consecutive months and
the Board resolves their office is vacated;
(v) they become bankrupt; (vi) they are
prohibited by law from being a Director;
(vii) they cease to be a Director by virtue
of the Companies Act 2006; or (viii) they
are removed from office pursuant to the
Articles.
Conflicts of interest
The Companies Act 2006 provides that
Directors must avoid a situation where
they have, or can have, a direct or indirect
interest that conflicts, or possibly may
conflict, with the Company’s interests.
Boards of public companies may authorise
conflicts and potential conflicts, where
appropriate, if their company’s articles of
association permit, which the Articles do.
The
Board
has
established
formal
procedures for the declaration, review and
authorisation of any conflicts of interest of
Board members. As part of the induction
process, a newly appointed Director will
be required to disclose any conflicts of
interest to the Company. Thereafter, each
Director has an opportunity to disclose
conflicts at the beginning of each Board
and Committee meeting and as part of an
annual effectiveness review.
In the case of the Executive Directors, each
of whom holds the position of Director of
the Company and director of a number of
Group subsidiary companies.
Directors’ indemnities and
insurance
The
Company
maintains
appropriate
Directors’ and Officers’ liability insurance
cover in respect of any potential legal
action brought against its Directors. The
Company
has
also
indemnified
each
Director to the extent permitted by law
against any liability incurred in relation to
acts or omissions arising in the ordinary
course of their duties. The indemnity
arrangements are qualifying indemnity
provisions under the Companies Act 2006
and were in force throughout the year.
Significant related party
agreements
At no time during the financial year ended
30 April 2024, did any of the Directors,
any close members of a Director’s family
or any controlling Shareholder of the
Company, have a material interest in any
contract with the Company or any of its
subsidiaries. There is no person with
whom the Group has a contractual or
other arrangement that is essential to the
business of the Company.
Share capital
The Company’s authorised and issued
Ordinary Share capital as at 30 April 2024
comprised a single class of Ordinary
Shares of £0.01 each. As at 30 April 2024,
the Company had 488,944,427 Ordinary
Shares in issue (net of shares pending
cancellation) and 3,355,682 were held in
Employee Benefit Trust. As at 27 June
2024, being the last practicable date
prior to publication of this report, the
Company’s issued share capital (net of
shares pending cancellation) comprised
488,180,628 fully paid Ordinary Shares and
3,355,682 shares were held in Employee
Benefit Trust.
The Company was authorised by its
shareholders at the 2023 AGM to purchase
its own shares. During the financial year
the Company purchased and cancelled
8,018,738
Ordinary
Shares
(1,500,000
Ordinary
shares
were
purchased
off-
market), at a total cost of €19,442 thousand
and representing 1.61% of its issued share
capital at the start of the year.
Details of the Ordinary Share capital
and shares cancelled during the year
can be found in note 16 to the financial
statements.
Details of share buy-backs during the
year can be found on page 68 and in
note 16.
Rights and restrictions attaching
to shares
The Company’s shares when issued are
credited as fully paid and free from all
liens, equities, charges, encumbrances
and other interests. All shares have the
same rights (including voting and dividend
rights and rights on return of capital) and
restrictions as set out in the Articles,
described below.
Except
in
relation
to
dividends
that
may
have
been
declared
and
rights
on
liquidation
of
the
Company,
the
Shareholders have no rights to share in
the profits of the Company.
The Company’s shares are not redeemable.
However, the Company may purchase or
contract to purchase any of the shares
on market, subject to the Companies Act
2006 and the requirements of the Listing
Rules.
Subject to the Articles of Association,
the
Companies
Act
2006
and
other
Shareholders’
rights,
shares
in
the
Company may be issued with such rights
and restrictions as the Shareholders may
by ordinary resolution decide, or if there
is no such resolution, as the Board may
decide provided it does not conflict with
any resolution passed by the Shareholders.
These rights and restrictions will apply to
the relevant shares as if they were set out
in the Articles of Association. Subject to
the Articles of Association, the Companies
Act 2006 and other Shareholders’ rights,
unissued shares are at the disposal of the
Board.
Restrictions on transfer of
securities in the Company
There are no specific restrictions on the
transfer of securities in the Company,
which is governed by its Articles of
Association and prevailing legislation,
save as set out on the next page.
The transferor of a share is deemed to
remain the holder until the transferee’s
name is entered in the register. The Board
can decline to register any transfer of any
share that is not a fully paid share. The
Company does not currently have any
partially paid shares.
The Board may also decline to register
a transfer of a certified share unless the
instrument of transfer: (i) is duly stamped or
certified or otherwise shown to be exempt
from stamp duty and is accompanied by a
relevant share certificate; (ii) is in respect
of only one class of share; and (iii) if to
joint transferees, is in favour of not more
than four such transferees. Registration of
a transfer of an uncertified share may be
refused in the circumstances set out in the
Uncertified Securities Regulations 2001.
The
Company
is
not
aware
of
any
agreements between Shareholders that
may result in restrictions on the transfer
of securities.
Voting rights
Shareholders will be entitled to vote at
a general meeting whether on a show
of hands or a poll, as provided in the
Companies Act.
Where a proxy is given discretion as to
how to vote on a show of hands, this will
be treated as an instruction by the relevant
Shareholder to vote in the way in which the
proxy decides to exercise the discretion.
This is subject to any special rights or
restrictions as to voting which are given
to any shares or upon which any shares
may be held at the relevant time and to the
Articles of Association.
If more than one joint holder votes
(including voting by proxy), the only vote
which will count is the vote of the person
whose name is listed first on the register
for the share.
Restrictions on voting
Unless the Directors decide otherwise, a
Shareholder cannot attend or vote at any
general meeting of the Company or upon
a poll or exercise any other right conferred
by membership in relation to general
meetings or polls if they have not paid all
amounts relating to those shares which
are due at the time of the meeting, or if they
have been served with a restriction notice
(as defined in the Articles of Association)
after failure to provide the Company with
information concerning interests in those
shares required to be provided under the
Companies Act 2006.
The
Company
is
not
aware
of
any
agreements between Shareholders that
may result in restrictions of voting rights.
Change of control
The Group’s term loan and credit facility
arrangements contain provisions that,
where the parties are unable to agree the
implications of any change of control,
on notice being given to the Group, the
lenders may exercise their discretion to
require repayment of a loan under the
agreement concerned.
Post-balance sheet events
Details of post-balance sheet events
are given in note 27 to the consolidated
financial statements.
Articles of Association
The
Company
has
not
adopted
any
special rules regarding the appointment
and replacement of Directors or the
amendment of the Articles of Association,
other than as provided for under UK
company law.
The Company’s Articles may be amended
by a Special Resolution of the Company’s
Shareholders. The existing Articles of
Association were adopted on 29 June
2021.
Company status and branches
Baltic Classifieds Group PLC is the holding
company of the Baltic Classifieds group
of companies and has no branches. It
is listed on the London Stock Exchange
main market with a premium listing, and is
registered in England and Wales (company
number 13357598).
Key Stakeholders
The long-term success of the Group is
dependent on its relationships with its
key Stakeholders. On pages 47 to 49 we
outline the ways in which we have engaged
with key Stakeholders, the material issues
they have raised with us, and how these
issues have been taken into account in the
Board’s decision-making processes.
Statement of Engagement
with Employees - Sch 7.11(1)
(b) Companies (Miscellaneous
Reporting) Regulations 2018
The engagement method used by the
Board for the purposes of Provision
5 of the Code is that the Executive
Directors take direct responsibility for
workforce related issues and the CEO,
CFO and COO provide updates at every
Board meeting which includes relevant
workforce updates. The Non-Executive
Directors rotate to attend sessions with
Group employees on a bi-annual basis.
This engagement method is effective
due to the management structure of the
Group, the Board is particularly hands-on,
engaged and committed to ensuring that
it understands the composition and views
of employees.
We
have
a
dynamic
and
motivated
team that likes to have fun and enjoy
working together. We believe this is the
cornerstone to our strength and continued
long-term success. It is vital for the
Group’s long-term success that we nurture
an environment where people feel valued,
motivated, and able to develop.
At the year end, the Group had 154
employees (on a headcount basis) and
an experienced Senior Management team
with an average tenure at the Group of 13
years.
The Company is an equal opportunities
employer and we are working hard to create
an environment for our employees that is
free from discrimination, harassment, and
victimisation, reflecting our commitment
to creating a diverse workforce and an
inclusive environment that supports all
individuals irrespective of their gender,
age, race, disability, sexual orientation, or
religion.
This
statement
should
be
read
in
conjunction with Engagement with our
Stakeholders on pages 47 to 48, the Non-
Financial and sustainability information
statement on page 36 and Board principal
decisions on page 49.
Statement of Engagement with
Other Business Relationships
- Sch 7.11B(1) Companies
(Miscellaneous Reporting)
Regulations 2018
The Directors have regard for the need
to
foster
the
Company’s
business
relationships with suppliers, customers
and others, and the effect of that regard,
including on the principal decisions taken
by the Company during the financial year.
This
statement
should
be
read
in
conjunction
with
our
Section
172(1)
Statement and Engagement with our
Stakeholders on pages 47 to 48, the Non-
financial and sustainability information
statement on page 36 and Board principal
decisions on page 49.
Political donations
There were no political donations made
during the financial year (€nil in previous
financial year).
Research and development
activities
The Company has dedicated in-house
software
design
and
development
teams, with primary focus on IT and
improvements to customer interfaces.
Greenhouse gas emissions
In
line
with
our
commitment
to
transparent and best practice reporting,
we have included a Sustainability Report
on pages 22 to 37. This includes our
Task Force on Climate-related Financial
Disclosures (“TCFD”) and our Streamlined
Energy and Carbon Reporting (“SECR”)
disclosures on pages 27 to 28, along
with our annual Greenhouse Gas (“GHG”)
emissions footprint and an intensity ratio
appropriate for our business, which fulfil
the requirements of the Companies Act
2006 (Strategic and Directors’ Report)
Regulations 2013.
Directors’ Report
continued
Directors’ Report
continued
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
71
Baltic Classifieds Group PLC Annual Report and Accounts 2024
70
Future developments of the
business
The Group’s likely future developments
including its strategy are described in the
Strategic Report on pages 2 to 40.
Going concern and viability
The Group’s Going Concern Statement
is
contained
within
the
consolidated
financial statements on page 82. The long-
term Viability Statement is set out on page
40.
2024 Annual General Meeting
Baltic Classifieds Group PLC’s 2024 AGM
will be held at G.D. Kuverto g. 15, Neringa,
LT-93123, Lithuania on 27 September 2024
at 11.00 am local time. The Notice of the
Meeting together with explanatory notes
is contained in the circular to Shareholders
that accompanies the Annual Report and
Accounts.
The Company will, at the AGM, continue to
seek authority to allot shares on the basis
of the authorities sought in the 2023 AGM.
At the 2023 annual general meeting held
in September 2023, all resolutions were
successfully passed with the requisite
majority. In the event we receive 20%
or more votes against a recommended
resolution at a general meeting, we
would announce the actions we intend
to take to engage with our Shareholders
to understand the result in accordance
with the Code. We would follow this
announcement with a further update
within six months of the meeting, with an
overview of our Shareholders’ views on
the resolutions and the remedial actions
we have taken.
Power for the Company to buy-
back its shares
The
Company
proposes
to
seek
authorisation from its Shareholders at its
AGM on 27 September 2024 to purchase in
the market up to 10% of its issued Ordinary
Shares (excluding any treasury shares),
subject to certain conditions laid out in
the authorising resolution. This standard
authority is renewable annually.
Disclosure of information to the
auditor
KPMG LLP was re-appointed as the
Group’s auditor (pursuant to the passing
of Resolution 12 at the 2023 AGM).
In accordance with Section 418 of the
Companies Act 2006, the Directors who
held office at the date of approval of this
Directors’ Report confirm that, so far as
they are each aware, there is no relevant
audit information of which the Company’s
auditor is unaware and that each Director
has taken all the steps that they ought
to have taken as a Director to make
themselves aware of any relevant audit
information and ensure that the auditor is
aware of such information.
Statement of Directors’
responsibilities in respect of the
Annual Report and Accounts
The Directors are responsible for preparing
this Annual Report and Accounts and for
the Group and parent Company financial
statements in accordance with applicable
law and regulations.
Company
law
requires
the
Directors
to prepare Group and parent Company
financial statements for each financial
year. Under that law they are required to
prepare the Group financial statements in
accordance with UK-adopted international
accounting
standards
and
applicable
law and have elected to prepare the
parent Company financial statements in
accordance with UK accounting standards
and applicable law, including FRS 102 The
Financial Reporting Standard applicable in
the UK and Republic of Ireland.
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 parent Company and of the Group’s
profit or loss for that period. In preparing
each of the Group and parent Company
financial statements, the Directors are
required to:
•
select suitable accounting policies and
then apply them consistently;
•
make judgments and estimates that
are reasonable, relevant, reliable and
prudent;
•
for the Group financial statements,
state whether they have been prepared
in
accordance
with
UK-adopted
international accounting standards;
•
for
the
parent
Company
financial
statements, state whether applicable
UK accounting standards have been
followed,
subject
to
any
material
departures disclosed and explained
in
the
parent
Company
financial
statements;
•
assess the Group and parent Company’s
ability to continue as a going concern,
disclosing,
as
applicable,
matters
related to going concern; and
•
use
the
going
concern
basis
of
accounting unless they either intend
to liquidate the Group or the parent
Company or to cease operations, or
have no realistic alternative but to do
so.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the parent
Company’s
transactions
and
disclose
with reasonable accuracy at any time
the
financial
position
of
the
parent
Company and enable them to ensure that
its financial statements comply with the
Companies Act 2006. They are responsible
for such internal control as they determine
is necessary to enable the preparation
of financial statements that are free
from
material
misstatement,
whether
due to fraud or error, and have general
responsibility for taking such steps as are
reasonably open to them to safeguard the
assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations,
the Directors are also responsible for
preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report
and
Corporate
Governance
Statement
that complies with that law and those
regulations.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on
the Company’s website. Legislation in
the UK governing the preparation and
dissemination of financial statements
may
differ
from
legislation
in
other
jurisdictions.
In accordance with Disclosure Guidance
and
Transparency
Rule
4.1.14R,
the
financial statements will form part of the
annual financial report prepared using the
single electronic reporting format under
the TD ESEF Regulation. The auditor’s
report
on
these
financial
statements
provides no assurance over the ESEF
format.
Directors’ confirmations
We confirm that to the best of our
knowledge:
•
the financial statements, prepared in
accordance with the applicable set
of accounting standards, give a true
and fair view of the assets, liabilities,
financial position and profit or loss of
the Company and the undertakings
included in the consolidation taken as a
whole; and
•
the Strategic Report includes a fair review
of the development and performance of
the business and the position of the
issuer and the undertakings included
in the consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that
they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair,
balanced
and
understandable
and
provides
the
information
necessary
for Shareholders to assess the Group’s
position
and
performance,
business
model and strategy.
The Directors’ Report is approved by the
Board and signed on its behalf by
Justinas Šimkus
Chief Executive Officer
2 July 2024
Independent Auditor’s Report to the
Members of Baltic Classifieds Group PLC
1. Our opinion is unmodified
We have audited the financial statements
of Baltic Classifieds Group PLC (“the
Company”) for the year ended 30 April
2024 which comprise the Consolidated
Statement of Profit or Loss and Other
Comprehensive Income, Consolidated and
Company Statement of Financial Position,
Consolidated and Company Statement
of
Changes
in
Equity,
Consolidated
Statement of Cash Flows, and the related
notes, including the accounting policies in
note 3.
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
April 2024 and of the Group’s profit 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 UK accounting
standards,
including
FRS
102
The
Financial Reporting Standard applicable
in the UK and Republic of Ireland
; and
•
the financial statements have been
prepared
in
accordance
with
the
requirements of the Companies Act
2006.
Directors’ Report
continued
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We
believe that the audit evidence we have
obtained is a sufficient and appropriate
basis for our opinion. Our audit opinion
is consistent with our report to the audit
committee.
We were first appointed as auditor by the
shareholders on 17 August 2021. The
period of total uninterrupted engagement
is for the three financial years ended 30
April 2024. We have fulfilled our ethical
responsibilities under, and we remain
independent of the Group in accordance
with, UK ethical requirements including
the FRC Ethical Standard as applied to
listed public interest entities. No non-audit
services prohibited by that standard were
provided.
Overview
Materiality:
group financial statements as a whole
€1.27m (2023:€0.90m)
3.6% (2023: 3.4%)
of Group profit before tax
Coverage
95% (2023: 98%)
of Group profit before tax
Key audit matters
vs 2023
Recurring risks
Advertising and Listings revenue
Recoverability of parent
Company's investment in
subsidiaries
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
72
73
The risk
Our response
Advertising and Listings revenue
(€ 68.31 million; 2023: €57.48 million)
Refer to page 57 Audit Committee
Report, page 83 accounting policy
and pages 91 to 92 note 6 of financial
disclosures.
Revenue:
The
key
revenue
streams,
being
Advertising and Listings, consist of fees
for advertising and listings of products
and services on the Group’s portals. There
are a high volume of transactions, no
significant concentration of customers
and a variety of set packages. Customers
have the ability to select the combination
of products they receive.
Based on our cumulative audit experience,
we considered that the risk relating to
revenue recognition has reduced in the
current year due to Group’s continued
performance and as there is not a material
judgement
or
estimation
in
revenue
recognition and there is no significant
opportunity
for
fraudulent
material
misstatement, given the low value and
high volume of individual transactions
We
continue
to
consider
revenue
recognition from advertising and listings
fees to be a key audit matter as it is the
main driver of the Group’s results and its
size is reflected in the allocation of our
resources in planning and executing the
audit.
We issued audit instructions to component
auditors to perform the following tests
below rather than seeking to rely on the
Group's controls, because our knowledge
of related IT controls indicated that we
would be unlikely to obtain the required
evidence to support reliance on controls.
Our
procedures
to
address
the
risk
included:
•
tests of detail:
performing a cash
receipts
to
revenue
predictive
analysis procedure with appropriate
consideration to adjusting items.
•
tests of detail:
inspecting a sample of
credit notes raised post year end for the
month of May to confirm that revenue
recognised in the year is not reversed
subsequent to the year end; and
•
tests of detail:
performed cut-off testing
for a sample of revenue items (invoices)
recognised in the month prior to and
the month post year-end to determine
that revenue was recognised in the
correct period in which the performance
obligation was fulfilled.
•
tests
of
detail:
using
sampling
techniques to test that accrued and
deferred income has been appropriately
recognised and is accurately recorded.
•
analytic sampling:
obtaining all journals
posted
to
revenue
and
analysing
those entries with unusual attributes
or those with corresponding postings
to
unexpected
accounts.
Agreeing
any
journals
identified
to
relevant
supporting documentation;
Our results
We
considered
the
Advertising
and
Listings revenue recognised in the year to
be acceptable (2023: acceptable).
Recoverability of parent
Company’s investment in
subsidiaries
(€511.8 million; 2023: €509.6 million)
Refer to page 57 Audit Committee
Report, page 109 accounting policy
and page 110 note 4 of financial
disclosures.
Low risk, high value:
The parent Company holds a direct
investment in BCG Holdco Limited and
an indirect investment in the Group’s
trading subsidiaries. The carrying amount
of the parent Company’s investment in
its subsidiary represents 82.7 % (2023:
83.7%) of the Company’s total assets.
Their recoverability is not at high risk of
significant misstatement or subject to
a significant judgement. However, due
to their materiality in the context of the
parent Company financial statements,
this is considered to be the area that had
the greatest effect on our overall parent
Company audit.
We did not seek to place reliance on the
Company’s controls in our response due to
the nature of the balance and of the risk.
Our procedures included:
•
Comparing valuations:
Comparing the
carrying amount of the investment to
the market capitalisation of the Group
to identify any indicators of impairment
Our results
We found the Company’s conclusion that
there is no impairment of the investment
in subsidiaries to be acceptable (2023:
acceptable).
3. Our application of materiality
and an overview of the scope of
our audit
Materiality
for
the
Group
financial
statements as a whole was set at €1.27m
(2023: €0.90m), determined with reference
to a benchmark of Group profit before tax
(of which it represents 3.6% (2023: 3.4%)).
Materiality
for
the
parent
company
financial statements as a whole was set
at €1.17m (2023: €0.25m), determined
with reference to a benchmark of parent
company total assets, limited to be less
than materiality for group materiality as a
whole. It represents 0.19% (2023: 0.04%) of
the stated benchmark. The change in the
percentage of the benchmark compared to
the prior year is due to the parent company
being a reporting component in prior year,
however in the current year the parent
company has been scoped out for the
group audit purposes because of its size
and risk.
In line with our audit methodology, our
procedures on individual account balances
and disclosures were performed to a lower
threshold, performance materiality, so as to
reduce to an acceptable level the risk that
individually
immaterial
misstatements
in individual account balances add up to
a material amount across the financial
statements as a whole.
Performance materiality was set at 75%
(2023: 65%) of materiality for the financial
statements as a whole, which equates
to €0.95m (2023: €0.59m) for the Group
and €0.88m (2023: €0.16m) for the parent
company. We applied this percentage
in
our
determination
of
performance
materiality because we did not identify any
factors indicating an elevated level of risk
in the current period given a lower level of
identified misstatements and changes to
the control environment. In the prior period,
we applied 65% in our determination of
performance materiality based on the
level of identified misstatements and
entity and process control deficiencies
during the period.
We agreed to report to the Audit Committee
any corrected or uncorrected identified
misstatements exceeding €0.06m (2023:
€0.05m), in addition to other identified
misstatements that warranted reporting
on qualitative grounds.
Of the group's 8 reporting components, we
subjected 2 (2023: 3) to full scope audits
for Group purposes and 1 (2023: 1) to
specified risk-focused audit procedures.
The latter was not financially significant
enough to require a full scope audit for
group purposes, however we included to
increase our audit coverage of Group profit
before tax.
The components within the scope of
our work accounted for the percentages
illustrated opposite.
Group profit before tax
€34.93m (2023: €26.37m)
Group materiality
€1.27m (2023 €0.90m)
€1.27m
Whole financialstatements materiality (2023: €0.90m)
€0.98m
Range of materiality at 2 components (€0.76m and
€0.98m) (2023: 3 components (€0.25m to €0.70m)
€0.06m
Misstatements reported to the audit committee (2023:
€0.05m)
€0.95m
Whole financialstatements performance materiality
(2023: €0.59m)
95%
(2023: 95%)
95
95
Group revenue
95%
(2023: 98%)
74
24
73
22
Group profit before tax
Group total assets
98%
(2023: 99%)
99
98
Full scope for group audit purposes 2024
Specified risk-focused audit procedures 2024
Full scope for group audit purposes 2023
Specified risk-focused audit procedures 2023
Residual components
Normalised PBT
Group materiality
Independent Auditor’s Report to the Members of Baltic Classifieds Group PLC
continued
Independent Auditor’s Report to the Members of Baltic Classifieds Group PLC
continued
2. Key audit matters: our
assessment of risks of material
misstatement
Key audit matters are those matters
that,
in
our
professional
judgement,
were of most significance in the audit
of the financial statements and include
the most significant assessed risks of
material misstatement (whether or not
due to fraud) identified by us, 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. We
summarise below the key audit matters
(unchanged from 2023), in decreasing
order of audit significance, in arriving at our
audit opinion above, together with our key
audit procedures to address those matters
and, as required for public interest entities,
our results from those procedures. These
matters were addressed, and our results
are based on procedures undertaken, in
the context of, and solely for the purpose
of, our audit of the financial statements
as a whole, and in forming our opinion
thereon, and consequently are incidental
to that opinion, and we do not provide a
separate opinion on these matters.
For
the
residual
components,
we
performed analysis at an aggregated
group level to re-examine our assessment
that there were no significant risks of
material misstatement within these.
The Group team instructed component
auditors as to the significant areas to
be covered, including the relevant risks
detailed above and the information to be
reported back.
The Group team approved the component
materialities which ranged from €0.98m to
€0.76m (2023: €0.70m to €0.25m), having
regard to the mix of size and risk profile of
the Group across the components.
The Group team visited one (2023: two)
component location in Lithuania (2023:
Lithuania and Estonia), to evaluate the
adequacy of the component auditors
audit documentation. Video and telephone
conference meetings were also held with
these in scope component auditors. These
meetings involved explanation of Group
audit instructions, involvement in planning
audit procedures, discussing progress
updates and emerging findings, reviewing
outcomes
of
testing
performed
and
discussing audit findings. The Group audit
team reviewed the audit documentation
of component audits through various
stages of their audits. The Group team
also attended component virtual closing
meetings. At these visits and meetings,
the findings reported to the Group team
were discussed in more detail, and any
further work required by the Group team
was then performed by the component
auditor.
The work on 2 of the 2 components (2023:
2 of the 3 components) was performed by
component auditors and the audit of the
parent company was performed by the
Group team.
The scope of the audit work performed
was predominately substantive as we
placed limited reliance upon the Group's
internal control over financial reporting.
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
74
75
4. The impact of climate change
on our audit
We have considered the potential impacts
of
climate
change
on
the
financial
statements as part of planning our audit.
We performed a risk assessment of the
impact of climate change risk and of the
Group’s processes in place to identify and
assess risks relevant to the Group and its
financial reporting.
Taking into account the nature of the
business operations, our risk assessment
of climate change to long term assets
and the solvency of the Group we did not
identify any risks that significantly impact
the financial statements of the Group or
our audit.
We read the disclosure of climate related
information in the front half of the annual
report and considered consistency with
the financial statements and our audit
knowledge.
5. Going concern
The directors have prepared the financial
statements on the going concern basis as
they do not intend to liquidate the Group or
the Company or to cease their operations,
and as they have concluded that the
Group’s
and
the
Company’s
financial
position means that this is realistic. They
have also concluded that there are no
material uncertainties that could have
cast significant doubt over their ability to
continue as a going concern for at least
a year from the date of approval of the
financial statements (“the going concern
period”).
We used our knowledge of the Group,
its industry, and the general economic
environment
to
identify
the
inherent
risks to its business model and analysed
how those risks might affect the Group’s
and Company’s financial resources or
ability to continue operations over the
going concern period. The risks that we
considered most likely to adversely affect
the Group’s and Company’s available
financial resources and metrics relevant
to debt covenants over this period were:
•
Lower than forecast revenues arising
from adverse changes to the competitive
environment and continuing geopolitical
tensions in neighbouring countries; and
•
Major data breach caused by cyber
attacks.
We considered whether these risks could
plausibly affect the liquidity or covenant
compliance in the going concern period by
comparing severe, but plausible downside
scenarios that could arise from these
risks individually and collectively against
the level of available financial resources
and covenants indicated by the Group’s
financial forecasts.
Our procedures also included a critical
assessment
of
the
assumptions
in
the Group’s base case and downside
scenarios, and our knowledge of the entity
and the sector in which it operates. We also
compared past budgets to actual results
to assess the directors’ track record of
budgeting
accurately.
We
considered
whether the going concern disclosure in
note 1 to the financial statements gives
a full and accurate description of the
directors’ assessment of going concern,
including the identified risks.
Our conclusions based on this work:
•
we consider that the directors’ use of
the going concern basis of accounting
in the preparation of the financial
statements is appropriate;
•
we have not identified, and concur with
the directors’ assessment that there is
not, a material uncertainty related to
events or conditions that, individually or
collectively, may cast significant doubt
on the Group’s or Company's ability to
continue as a going concern for the
going concern period;
•
we have nothing material to add or draw
attention to in relation to the directors’
statement in Note 2 to the Group
and Note 1 to the Company financial
statements on the use of the going
concern basis of accounting with no
material uncertainties that may cast
significant doubt over the Group and
Company’s use of that basis for the
going concern period, and we found the
going concern disclosure in those notes
to be acceptable; and
•
the related statement under the Listing
Rules set out on page 82 is materially
consistent with the financial statements
and our audit knowledge.
However, as we cannot predict all future
events or conditions and as subsequent
events may result in outcomes that are
inconsistent with judgements that were
reasonable at the time they were made,
the above conclusions are not a guarantee
that the Group or the Company will
continue in operation
6. Fraud and breaches of laws
and regulations – ability to
detect
Identifying and responding to risks of
material misstatement due to fraud
To identify risks of material misstatement
due to fraud (“fraud risks”) we assessed
events or conditions that could indicate
an incentive or pressure to commit fraud
or provide an opportunity to commit fraud.
Our risk assessment procedures included:
•
Enquiring
of
directors,
the
audit
committee,
internal
audit,
Group’s
legal counsel and inspection of policy
documentation as to the Group’s high-
level policies and procedures to prevent
and detect fraud, including the internal
audit function, and the Group’s channel
for “whistleblowing”, as well as whether
they have knowledge of any actual,
suspected or alleged fraud.
Independent Auditor’s Report to the Members of Baltic Classifieds Group PLC
continued
Independent Auditor’s Report to the Members of Baltic Classifieds Group PLC
continued
•
Reading Board and audit committee
minutes.
•
Considering
remuneration
incentive
schemes and performance targets for
management, directors and other staff.
•
Using
analytical
procedures
to
identify any unusual or unexpected
relationships.
We communicated identified fraud risks
throughout the audit team and remained
alert to any indications of fraud throughout
the audit. This included communication
from the Group audit team to full scope
component audit teams of relevant fraud
risks identified at the Group level and
request to full scope component audit
teams to report to the Group audit team
any instances of fraud that could give rise
to a material misstatement at the Group
level.
As required by auditing standards and
our overall knowledge of the control
environment, we perform procedures to
address the risk of management override
of controls, in particular the risk that Group
and component management may be in a
position to make inappropriate accounting
entries. On this audit we do not believe
there is a fraud risk related to revenue
recognition because there is no material
judgement
or
estimation
in
revenue
recognition and no significant opportunity
for
fraudulent
material
misstatement,
given the low value and high volume of
individual transactions.
We did not identify any additional fraud
risks.
We also performed procedures including:
•
Identifying journal entries and other
adjustments to test for all full scope
components based on risk criteria
and comparing the identified entries
to supporting documentation. These
included
those
posted
to
unusual
accounts,
those
posted
by
senior
finance management, those posted to
credit expense accounts with rounded
numbers or ending in ‘999 and those
posted with unusual descriptions.
Identifying and responding to risks
of material misstatement related to
compliance with laws and regulations
We identified areas of laws and regulations
that could reasonably be expected to
have a material effect on the financial
statements from our general commercial
and sector experience, through discussion
with the directors and other management
(as required by auditing standards), and
discussed with the directors and other
management the policies and procedures
regarding
compliance
with
laws
and
regulations.
We communicated identified laws and
regulations throughout our team and
remained alert to any indications of non-
compliance throughout the audit. This
included communication from the Group
audit team to full scope component audit
teams of relevant laws and regulations
identified at the Group level, and a request
for full scope component auditors to
report to the Group audit team any
instances of non-compliance with laws
and regulations that could give rise to a
material misstatement at the Group level.
The potential effect of these laws and
regulations on the financial statements
varies considerably.
Firstly, the Group is subject to laws
and regulations that directly affect the
financial statements including financial
reporting legislation (including related
companies
legislation),
distributable
profits legislation and taxation legislation,
and we assessed the extent of compliance
with these laws and regulations as part of
our procedures on the related financial
statement items.
Secondly, the Group is subject to many
other laws and regulations where the
consequences of non-compliance could
have a material effect on amounts or
disclosures in the financial statements, for
instance through the imposition of fines
or litigation. We identified the following
areas as those most likely to have such
an effect: data protection laws, anti-
competition, anti-bribery, employment law,
consumer protection and certain aspects
of company legislation recognising the
nature of the Group’s activities. Auditing
standards
limit
the
required
audit
procedures to identify non-compliance
with these laws and regulations to enquiry
of the directors and other management
and inspection of regulatory and legal
correspondence, if any. Therefore if a
breach of operational regulations is not
disclosed to us or evident from relevant
correspondence, an audit will not detect
that breach.
Context of the ability of the audit to
detect fraud or breaches of law or
regulation
Owing to the inherent limitations of an
audit, there is an unavoidable risk that
we may not have detected some material
misstatements in the financial statements,
even though we have properly planned
and performed our audit in accordance
with auditing standards. For example,
the further removed non-compliance with
laws and regulations is from the events
and transactions reflected in the financial
statements, the less likely the inherently
limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there
remained a higher risk of non-detection
of fraud, as these may involve collusion,
forgery,
intentional
omissions,
misrepresentations, or the override of
internal controls. Our audit procedures are
designed to detect material misstatement.
We are not responsible for preventing
non-compliance or fraud and cannot be
expected to detect noncompliance with all
laws and regulations.
7. We have nothing to report
on the other information in the
Annual Report
The directors are responsible for the other
information presented in the Annual Report
together with the financial statements.
Our opinion on the financial statements
does not cover the other information and,
accordingly, we do not express an audit
opinion or, except as explicitly stated
below, any form of assurance conclusion
thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether, based on our financial statements
audit work, the information therein is
materially misstated or inconsistent with
the financial statements or our audit
knowledge. Based solely on that work we
have not identified material misstatements
in the other information.
Strategic report and directors’ report
Based solely on our work on the other
information:
•
we
have
not
identified
material
misstatements in the strategic report
and the directors’ report;
•
in our opinion the information given
in
those
reports
for
the
financial
year is consistent with the financial
statements; and
•
in our opinion those reports have
been prepared in accordance with the
Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’
Remuneration Report to be audited has
been properly prepared in accordance with
the Companies Act 2006.
Disclosures of emerging and principal
risks and longer-term viability
We are required to perform procedures
to identify whether there is a material
inconsistency
between
the
directors’
disclosures in respect of emerging and
principal risks and the viability statement,
and the financial statements and our audit
knowledge.
Based on those procedures, we have
nothing material to add or draw attention
to in relation to:
•
the directors’ confirmation within the
viability statement on page 40 that they
have carried out a robust assessment of
the emerging and principal risks facing
the Group, including those that would
threaten its business model, future
performance, solvency and liquidity;
•
the
Emerging
and
Principal
Risks
disclosures describing these risks and
how emerging risks are identified, and
explaining how they are being managed
and mitigated; and
•
the
directors’
explanation
in
the
viability statement of how they have
assessed the prospects of the Group,
over what period they have done so
and why they considered that period
to be appropriate, and their statement
as to whether they have a reasonable
expectation that the Group will be able
to continue in operation and meet its
liabilities as they fall due over the period
of their assessment, including any
related disclosures drawing attention
to
any
necessary
qualifications
or
assumptions.
We are also required to review the
viability statement, set out on page 40
under the Listing Rules. Based on the
above procedures, we have concluded
that the above disclosures are materially
consistent with the financial statements
and our audit knowledge.
Our work is limited to assessing these
matters
in
the
context
of
only
the
knowledge acquired during our financial
statements audit. As we cannot predict
all future events or conditions and as
subsequent events may result in outcomes
that are inconsistent with judgements that
were reasonable at the time they were
made, the absence of anything to report
on these statements is not a guarantee as
to the Group’s and Company’s longer-term
viability.
Corporate governance disclosures
We are required to perform procedures
to identify whether there is a material
inconsistency
between
the
directors’
corporate governance disclosures and
the financial statements and our audit
knowledge.
Based on those procedures, we have
concluded that each of the following is
materially consistent with the financial
statements and our audit knowledge:
•
the
directors’
statement
that
they
consider that the annual report and
financial statements taken as a whole
is fair, balanced and understandable,
and provides the information necessary
for shareholders to assess the Group’s
position and performance, business
model and strategy;
•
the
section
of
the
annual
report
describing
the
work
of
the
Audit
Committee, including the significant
issues
that
the
audit
committee
considered in relation to the financial
statements, and how these issues were
addressed; and
•
the section of the annual report that
describes the review of the effectiveness
of the Group’s risk management and
internal control systems.
We are required to review the part of
the
Corporate
Governance
Statement
relating to the Group’s compliance with
the
provisions
of
the
UK
Corporate
Governance Code specified by the Listing
Rules for our review. We have nothing to
report in this respect.
FINANCIAL STATEMENTS
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77
8. We have nothing to report
on the other matters on which
we are required to report by
exception
Under the Companies Act 2006, we are
required 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.
We have nothing to report in these
respects.
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
For the year ended 30 April 2024
Note
2024
(€ thousands)
2023
(€ thousands)
Revenue
6
Other income
Expenses
7
(33,755 )
(31,767 )
Operating profit
Finance income
9
Finance expenses
9
(3,649 )
(2,698 )
Net finance costs
(3,411 )
(2,691 )
Profit before tax
Income tax expense
10
(2,878 )
(3,150 )
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Attributable to:
Owners of the Company
Earnings per share (€ cents)
Basic
11
Diluted
11
Independent Auditor’s Report to the Members of Baltic Classifieds Group PLC
continued
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement
set out on page 70, the directors are
responsible for: the preparation of the
financial
statements
including
being
satisfied that they give a true and fair view;
such internal control as they determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error; assessing the Group and
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 they 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
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 our opinion in
an auditor’s report. Reasonable assurance
is a high level of assurance, but does
not 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 aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of the financial statements.
A fuller description of our responsibilities
is provided on the FRC’s website at www.
frc.org.uk/auditorsresponsibilities.
The Company is required to include
these financial statements in an annual
financial report prepared under Disclosure
Guidance and Transparency Rule 4.1.17R
and 4.1.18R. This auditor’s report provides
no assurance over whether the annual
financial report has been prepared in
accordance with those requirements.
10 The purpose of our audit
work and to whom we owe our
responsibilities
This report is made solely to the 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 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 Company and the Company’s
members, as a body, for our audit work,
for this report, or for the opinions we have
formed.
Kate Teal (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory
Auditor
Chartered Accountants
66 Queen Square
Bristol
BS1 4BE
2 July 2024
FINANCIAL STATEMENTS
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79
Consolidated Statement of Financial Position
At 30 April 2024
Note
2024
(€ thousands)
2023
(€ thousands)
Assets
Property, plant and equipment
Intangible assets and goodwill
12
Right-of-use assets
13
Deferred tax assets
10
Non-current assets
Trade and other receivables
14
Cash and cash equivalents
15
Current assets
Total Assets
Equity
Share capital
16
Own shares held
17
(5,854 )
(6,252 )
Capital reorganisation reserve
(286,904 )
(286,904 )
Capital redemption reserve
Retained earnings
Total equity
Loans and borrowings
19
Deferred tax liabilities
10
Non-current liabilities
Current tax liabilities
10
Loans and borrowings
19
Trade and other payables
20
Contract liabilities
6
Current liabilities
Total liabilities
Total equity and liabilities
These financial statements were approved by the board of directors on 2 July 2024 and were signed on its behalf by:
Justinas Šimkus
Director
Company registered number: 13357598
1
See note 3 for further details.
Consolidated Statement of Changes in Equity
For the year ended 30 April 2024
Note
Share
Capital
(€ thousands)
Own
shares
held
(€ thousands)
Capital
reorganisation
reserve
(€ thousands)
Capital
redemption
reserve
(€ thousands)
Retained
earnings
(€ thousands)
Total
Equity
(€ thousands)
Balance at 30 April 2022
(3,418 )
(286,904 )
Profit for the year
Other comprehensive
income
Total comprehensive
income
Transactions with owners:
Share-based payments
24
Tax impact of share-based
payments
Purchase of shares for
performance share plan
17
(2,834 )
(2,834 )
Purchase of shares for
cancellation
16
(39 )
(5,775 )
(5,775 )
Dividends
18
(10,918 )
(10,918 )
Balance at 30 April 2023
(6,252 )
(286,904 )
Profit for the year
Other comprehensive
income
Total comprehensive
income
Transactions with owners:
Share-based payments
24
Tax impact of share-based
payments
(20 )
(20 )
Exercise of employee share
schemes
17
(395 )
Purchase of shares for
cancellation
16
(93 )
(19,442 )
(19,442 )
Dividends
18
(13,252 )
(13,252 )
Balance at 30 April 2024
(5,854 )
(286,904 )
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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81
Consolidated Statement of Cash Flows
For the year ended 30 April 2024
Note
2024
(€ thousands)
2023
(€ thousands)
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
7
Profit on property, plant and equipment disposals
(4 )
Taxation
10
Net finance costs
9
Share-based payments
24
Other non-cash items
Working capital adjustments:
Increase in trade and other receivables
(958 )
(448 )
Increase in trade and other payables
Increase in contract liabilities
Cash generated from operating activities
Corporate income tax paid
(4,714 )
(3,122 )
Interest received
Interest and commitment fees paid
(3,292 )
(2,208 )
Net cash inflow from operating activities
Cash flows from investing activities
Acquisition of intangible assets and property, plant and equipment
(306 )
(251 )
Proceeds from sale of property, plant and equipment
Acquisition of business
(1,600 )
Net cash used in investing activities
(303 )
(1,847 )
Cash flows from financing activities
Repayment of loans and borrowings
19
(20,000 )
(14,000 )
Payment of lease liabilities
(305 )
(247 )
Purchase of own shares for cancellation
16
(19,540 )
(5,663 )
Purchase of own shares for performance share plan
17
(2,834 )
Proceeds from exercise of share options
Dividends paid
18
(13,252 )
(10,918 )
Net cash used in financing activities
(53,094 )
(33,662 )
Net cash (outflow)/ inflow from operating,
investing and financing activities
(2,199 )
Differences on exchange
(14 )
Net (decrease) /increase in cash and cash equivalents
(2,213 )
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Notes to the Consolidated Financial
Statements
registered office is Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH (Company no. 13357598). The
principal business of the Group is operating leading online classifieds portals for automotive, real estate, jobs and services, and general
statements
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The parent
company financial statements present information about the Company as a separate entity and not about its group. The Company has
elected to prepare its parent company financial statements in accordance with FRS 102; these are presented on pages 106 to 112.
Basis of measurement
These consolidated financial statements have been prepared on the historical cost basis, unless otherwise stated in the accounting
policies below.
Subsidiaries are entities controlled by the Group. Control exists when the Group has existing rights that give it the ability to direct the
relevant activities of an entity and has the ability to affect the returns the Group will receive as a result of its involvement with the
entity. In assessing control, potential voting rights are taken into account. The financial statements of subsidiaries are included in the
These consolidated financial statements are presented in Euro (€), which is the Company’s functional currency. All amounts are rounded
to the nearest thousand (€ 000), except where otherwise indicated.
The Group companies use Euro (€) as a functional currency considering the nature of the Group companies’ revenue, costs, and debt
instruments. The Company and its direct subsidiary BCG Holdco Limited are UK based companies with their share capital denominated
in British pound (£). All equity transactions of these companies as well as a majority of operating expenses the companies incurred are
in British pound (£). However, while being the ultimate holding companies, Baltic Classifieds Group PLC and BCG Holdco Limited follow
The preparation of the consolidated financial statements, in accordance with UK-adopted IFRS, requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised or in any future periods affected.
Estimates
As at 30 April 2024, there were no significant estimates that would have a significant risk of material adjustment to the carrying amounts
of assets within the next financial year.
Other estimates:
•
Carrying values of goodwill. An impairment review is performed of goodwill balances by the Group on a ‘value in use’ basis. This
requires making assumptions and estimates in calculating the future cash flows, the time period over which they occur, and in arriving
at an appropriate discount rate to apply to the cashflows as well as an appropriate long term growth rate. Each of these assumptions
and estimates has an impact on the overall value of cashflows expected and therefore the headroom between the cashflows and
carrying values of the cash generating units. Key assumptions and uncertainties for impairment are disclosed in note 12.
•
Useful lives of intangible assets. A useful life is assigned to an acquired intangible asset based on the estimated period of time an
asset is likely to remain in service. This estimate has an impact on the amortisation expense for any given period. Useful lives of
intangible assets are disclosed in note 3.
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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83
FINANCIAL STATEMENTS
Judgements
As at 30 April 2024, there were no significant judgements that would have a significant risk of material adjustment to the carrying
amounts of assets within the next financial year.
Other judgements:
•
Deferred tax asset. An unrecognised deferred tax asset of €2,652 thousand (30 April 2023: €3,934 thousand) has not been recognised
in relation to tax losses incurred by the Company's indirect subsidiary UAB Antler Group and direct subsidiary BCG HoldCo Limited.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised. Recognition, therefore, involves judgement regarding the probability of future taxable profit of
the indirect subsidiary being available. Taxable losses carried forward for which no deferred tax asset is recognised are discussed in
The Directors have made an assessment of the Group’s ability to continue as a going concern covering a period of at least 12 months
from the date of approval of these consolidated financial statements and has a reasonable expectation that the Group has adequate
resources to continue in operational existence over this period.
The Group meets its day-to-day working capital requirements from cash balances, if needed the Group also has access to a revolving
credit facility that amounts to €10,000 thousand and is available until July 2026. As at 30 April 2024 no amounts of the revolving credit
facility were drawn down.
The Group has a bank loan which matures in July 2026 and its availability is subject to continued compliance with certain covenants,
it becomes repayable on demand in the case of a change in control. The Group voluntarily repaid €20,000 thousand of the loan during
2024, the outstanding balance at the year ends amounts to €50,000 thousand. The Group had cash balances of €24,857 thousand at the
year end. After 30 April 2024, the Group has made a further voluntary repayment of debt of €5,000 thousand.
During the financial year ended 30 April 2024 the Group has generated a profit of €32,047 thousand. The Directors also prepared detailed
cash flow forecasts for the period ending 12 months from the date of approval of these consolidated financial statements. The future
growth assumptions used in the cash flow forecasts are based on the Group’s historical performance and the Directors’ experience of
the industry, and take into account both internal and external factors.
Stress case scenarios have been modelled to make the assessment of going concern to take into account severe but plausible
potential impacts of a major data breach, adverse changes to the competitive environment and continuing geopolitical tensions in the
neighbouring countries. The stress testing indicates that the Group would be able to withstand the impact, remain cash generative and
be able to continue to comply with debt covenants for the assessment period.
Consequently, the Directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of these consolidated financial statements and therefore have prepared these consolidated
Effective new standards as at 1 May 2023
The following amendments to standards have been adopted by the Group for the first time for the financial year beginning on 1 May
2023:
•
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts;
•
Definition of Accounting Estimates (Amendments to IAS 8);
•
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
•
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
The adoption of these amendments has had no material effect on the Group’s consolidated financial statements.
There are a few amendments to IFRS that have been issued by the IASB that become mandatory in subsequent accounting periods
including:
•
Amendments to IFRS 16 impacting Lease Liabilities in a Sale and Leaseback arrangement;
•
Classification of Liabilities as Current or Non-Current (Amendments to IAS 1);
•
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7);
•
Lack of exchangeability (Amendments to IAS 21);
•
UK legislation on international tax system reform (BEPS);
•
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures
1
.
The Group is assessing the impact of these new standards and the Group’s financial reporting will be presented in accordance with
these standards in later reporting periods. The Group is not in scope for Pillar Two rules, as it does not meet the threshold of annual
revenue of €750 million and therefore the amendment to IAS12 in relation to Pillar Two has no impact.
1
The implementation and the effective dates of IFRS Sustainability Disclosure Standards are
The Group has consistently applied the accounting policies to all the periods presented in these consolidated financial statements.
The Group’s revenue streams include listings revenue, advertising revenue, financial intermediation and ancillary revenue. The different
types of services offered to customers along with the nature and timing of satisfaction of performance obligations are set as follows:
Listing fees
The Group operates leading online classifieds portals for automotive, real estate, jobs and services, and general merchandise. Listing
fees revenue is generated from both private (“C2C”) and business customers (“B2C”).
Private customers pay a fee in advance to advertise their product (automotive, real estate, general merchandise) on the Group’s platform
for a specified period. Revenue is deferred until the customer obtains control over the services. Control is obtained by customers across
the life of the contract as their product is continuously listed, or the period of service, if shorter. Contracts for these services are typically
entered into for a period of between a day and a year.
Business customers pay fees to obtain a “service pack” which allows the customer to advertise a set number of listings during a period,
unused listings cannot be rolled over. Revenue is deferred until the customer obtains control over the services. Control is obtained by
the customers across the life of the performance obligation being provided, which is either the set period in the contract, or the period
of service, if shorter. Any unused listings at the end of the contract period are invoiced at the end of the contract period. B2C typically
invoice monthly, although some contracts are annual contracts and have 7-60 days settlement terms.
The Group applies a fixed price to all listings, both C2C and B2C.
One of the Group’s general merchandise platforms, Osta.ee allows a customer to fill an e-wallet with money that can then be used to pay
for services provided by the Group. The customer can cash out at any time. This cash balance is therefore accounted for as a financial
liability labelled ‘customer credit balances’ within trade and other payables in the consolidated statement of financial position and as
cash within cash and cash equivalents. This cash is physically separated from the rest in a dedicated bank account and, although there
is no formal restriction on this cash, the Group’s policy is to keep the cash balance at a level not lower than the e-wallet balance. No
revenue is recognised unless the customer purchases a product provided by the Group using money from their e-wallet. Revenue is then
recognised in accordance with the product purchased.
Advertising
Advertising revenue comprises fees (net of rebates) from business customers for banner advertising on the Group’s platforms. The
customer pays fees to advertise on the Group’s platforms. Revenue is deferred until the customer obtains control over the services.
Control is obtained by the customers over the life of the advertisement. Customers are typically invoiced monthly and have a 7-60 days
settlement term.
Ancillary
Ancillary revenue comprises revenue from financial intermediation, subscription services and other.
Ancillary revenue is recognised as the Group satisfies its performance obligation by bringing leads to a customer or by providing
other agreed services. Financial intermediation revenue comprises commission fees from financial institutions for directing potential
customers from the Group’s portals to financing offers such institutions provide. At the beginning of each month the Group agrees
certain traffic metrics with financial institutions and issues invoices for the commission or a minimum agreed fee. Revenue is recognised
as the Group satisfies its performance obligation by directing potential customer traffic to the financial institutions.
The revenue accounting policy across business lines is the same for each revenue stream, i.e. advertising revenue is accounted for the
same in both automotive and real estate business lines.
The timing of the satisfaction of performance obligations usually is the same as the typical timing of payment or recognition of trade
attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest
2. Principles of preparation of consolidated financial statements
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
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85
FINANCIAL STATEMENTS
Income tax on the profit or loss for the period comprises current and deferred tax. Income tax is recognised in profit or loss except to the
extent that it relates to items recognised directly to equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantially enacted at the
reporting date, and any adjustment to tax payable in respect of previous years.
reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on laws
that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and if they relate to income taxes levied by the same tax authority.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable
that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date
Operating segment information is reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM). The CODM, who is responsible for allocating resources, assessing performance of the operating segment and making
Basic earnings per share and diluted earnings per share are presented for ordinary shares. Basic earnings per share is calculated by
dividing profit / (loss) attributable to owners of the Company by the weighted average number of shares outstanding.
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account the weighted
average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential
ordinary shares.
The Group’s potential dilutive instruments are in respect of share-based incentives granted to employees, which will be settled by
Business combinations are accounted for using the acquisition method when control is transferred to the Group. The consideration
transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested
annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as
incurred, except if related to the issuance of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If the obligation to pay contingent consideration meets
the definition of a financial instrument and is classified as equity, it is not remeasured, and settlement is accounted for within equity.
Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value
NCI are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other
components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured
d) Transactions eliminated on consolidation
All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated
a) Recognition and measurement
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
Other intangible assets, including customer relationships, software and trademarks, that are acquired by the Group and have finite
Costs associated with maintaining software programmes are recognised as an expense as incurred. Material development costs that
are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as
intangible assets where the following criteria are met:
•
it is technically feasible to complete the software so that it will be available for use
•
management intends to complete the software and use or sell it
•
there is an ability to use or sell the software
•
it can be demonstrated how the software will generate probable future economic benefits
•
adequate technical, financial and other resources to complete the development and to use or sell the software are available, and
•
the expenditure attributable to the software during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software include employee costs. Capitalised development costs are
recorded as intangible assets and amortised from the point at which the asset is ready for use.
Research expenditure and development expenditure that do not meet the criteria above are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as
incurred.
d) Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method
over their estimated useful lives and is recognised in profit or loss. Goodwill is not amortised. Estimated useful lives are as follows:
Trademarks and domains | 10 years |
Relationship with clients | 5-7 years |
Other intangible assets | 3-7 years |
expenditure that is directly attributable to the acquisition of the asset.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property,
plant and equipment.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will
obtain ownership by the end of the lease term.
The estimated useful lives are as follows:
Buildings 15-20 years |
Vehicles 4-10 years |
Other 3-6 years |
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether
a contract conveys the right to control the use of the identified asset, the Group uses the definition of a lease in IFRS 16 Leases.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-
use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful
life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and type of the asset leased.
3. Material accounting policy information
continued
3. Material accounting policy information
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
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FINANCIAL STATEMENTS
Lease payments included in the measurement of the lease liability comprise the following:
•
Fixed payments, including in-substance fixed payments
•
Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date
•
Amounts expected to be payable under a residual value guarantee
•
The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal
period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the
Group is reasonably certain not to terminate early
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in the
future lease payments arising from a change in an index or rate, if there is a change in the Group‘s and the Group’s estimate of the
amount expected to be payable under a residual value guarantee, if the Group’s changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset
or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in `Right-of-use assets’ and lease liabilities
At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication of
impairment. If any such indications exist, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use,
that are largely independent of the cash inflows of other assets (the “cash-generating unit, or CGU”).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is
based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are
recognised in profit or loss. Impairment loss is reversed to the extent that the asset’s carrying amount does not exceed the carrying
Cash includes cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts
of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity.
i) Initial recognition and measurement
The Group qualifies financial assets to one of the following categories:
•
measured at amortised cost
•
measured at fair value through other comprehensive income
•
measured at fair value through profit or loss
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and
the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing
component, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through
profit or loss, transaction costs. Trade receivables that do not contain a significant financing component are measured at the transaction
price determined under IFRS 15.
The Group’s business model for managing financial assets refers to how the Group manages its financial assets in order to generate
cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial
assets, or both.
Purchases or sales of financial assets are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the
asset.
ii) Subsequent measurement
After initial recognition, the Group measures a financial asset at amortised cost (debt instruments).
iii) Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
•
The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash
flows and
•
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment.
Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group’s financial assets at amortised cost includes trade, other current and non-current receivables and contract assets.
As relevant for:
•
Financial assets measured at amortised cost
•
Contract assets
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month
ECLs:
•
debt securities that are determined to have low credit risk at the reporting date
•
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial
instrument) has not increased significantly since initial recognition
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating
ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit
assessment, and includes forward-looking information.
The Group considers a financial asset to be in default when the financial asset is more than 180 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or
a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit
risk.
v) Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e.
the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to
receive).
ECLs are discounted at the effective interest rate of the financial asset.
vi) Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
vii) Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial
asset in its entirety or a portion thereof. For individual and corporate customers, the Group individually makes an assessment with
respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no
significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement
i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings and
payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings, lease liabilities
and financial liabilities measured at fair value with changes recognised in profit or loss.
ii) Subsequent measurement
The measurement of financial liabilities depends on their classification.
After initial recognition, the Group’s loans, borrowings and other payables are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss, when the liabilities are derecognised as well as through the EIR amortisation
process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
3. Material accounting policy information
continued
3. Material accounting policy information
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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FINANCIAL STATEMENTS
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, i.e. to realize the
Equity-settled awards are valued at the grant date, and the fair value is charged as an expense in the income statement spread over
the vesting period. Fair value of the awards are measured using Black-Scholes pricing model. The credit side of the entry is recorded in
equity. Cash-settled awards are revalued at each reporting date with the fair value of the award charged to the profit and loss account
Incremental costs directly attributable to the issue of ordinary shares are recognised as deductions from equity. Income tax relating to
transaction costs of equity transactions is accounted for in accordance with IAS 12.
Where the Group purchases its own equity share capital, the consideration paid is deducted from equity attributable to the Group’s
shareholders. Where such shares are subsequently cancelled, the nominal value of the shares repurchased is deducted from share
The Employee Benefit Trust (‘EBT’) provides for the issue of shares to Group employees principally under Performance Share Plan
scheme. The Group has control of the EBT and therefore consolidates the EBT in the Group financial statements. Accordingly, shares in
Capital reorganisation reserve
The capital reorganisation reserve arose on consolidation as a result of the share for share exchange transactions that took place on 5
July 2021. It represents the difference between the nominal value of shares issued by Baltic Classifieds Group PLC in this transaction
and the share capital and other capital reserves of ANTLER TopCo S.a.r.l.
Capital redemption reserve
The capital redemption reserve arises from the purchase and subsequent cancellation of the Group’s own equity share capital.
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which
the dividend is approved by the Company’s shareholders in the case of final dividends, or the date at which they are paid in the case of
Contingent liabilities are not recognised in the consolidated financial statements but are disclosed unless the possibility of an outflow
of resources embodying economic benefits is remote.
Contingent assets are not recognised in the consolidated financial statements, unless the realisation of income is virtually certain. They
In the analysis of the Group’s financial performance, certain information disclosed in the financial statements may be prepared on a non-
GAAP basis or has been derived from amounts calculated in accordance with IFRS but are not themselves an expressly permitted GAAP
measure. These measures are reported in line with the way in which financial information is analysed by management and designed to
increase comparability of the Group’s year-on-year financial position, based on its operational activity. These measures are not designed
to be a substitute for any of the IFRS measures of performance and may not be directly comparable with other companies’ alternative
performance measures. The key alternative performance measures presented by the Group are:
•
Adjusted operating profit which is Operating profit after adding back acquired intangibles amortisation. This measure helps to provide
an indication of the Group’s ongoing business performance.
•
EBITDA which is Operating profit after adding back depreciation and amortisation. This measure is used internally to assess business
performance and in budgeting and forecasting.
•
EBITDA margin which is EBITDA as a percentage of revenue. Progression in EBITDA margin is an important indicator of the Group’s
operating efficiency.
•
Adjusted EBITDA which is EBITDA after one-off IPO related costs. This is one of the key metrics used by management to assess
operating performance of the business and is used in assessing covenant compliance for the Group’s loan facility.
•
Adjusted EBITDA margin which is Adjusted EBITDA as a percentage of revenue. Progression in EBITDA margin is an important
indicator of the Group’s operating efficiency.
•
Adjusted net income which is Profit for the period after adding back post-tax impact of acquired intangibles amortisation and one-off
corporate income tax credit relating to 2021. It is used to arrive at Adjusted basic EPS and in applying the Group’s capital allocation
policy.
•
Adjusted basic EPS which is Adjusted net income divided by the weighted average number of ordinary shares in issue. This measure
helps to provide an indication of the Group’s ongoing business performance.
•
Net Debt which is calculated as total debt (bank loans principal and Osta.ee customer credit balances) less cash and cash equivalents.
See Revenue subsection of note 3 for more information on Osta.ee credit balances. Net debt is used to arrive at the leverage ratio.
•
Leverage which is calculated as Net Debt to EBITDA (or adjusted EBITDA in previous periods where relevant) over last twelve months
(LTM) ratio. This measure is used in assessing covenant compliance for the Group’s loan facility which includes a Total Leverage
Ratio covenant (see note 19).
•
Cash conversion which is EBITDA (or adjusted EBITDA in previous periods where relevant) after deducting acquisition of intangible
assets and property, plant and equipment as a percentage of EBITDA (or adjusted EBITDA in comparative periods). This measure is
used to monitor the Group’s operational efficiency.
Reconciliation of alternative performance measures
Adjusted operating profit | 2024 | 2023 |
(€ thousands) | (€ thousands) | |
Operating Profit | 38,337 | 29,056 |
Acquired intangibles amortisation | 16,208 | 16,198 |
Adjusted Operating Profit | 54,545 | 45,254 |
EBITDA | 2024 | 2023 |
(€ thousands) | (€ thousands) | |
Operating Profit | 38,337 | 29,056 |
Depreciation and amortisation 1 | 16,918 | 16,989 |
EBITDA | 55,255 | 46,045 |
EBITDA margin | 77% | 76% |
Adjusted net income | 2024 | 2023 |
(€ thousands) | (€ thousands) | |
Profit for the year | 32,048 | 23,215 |
Acquired intangibles amortisation | 16,208 | 16,198 |
Deferred tax effect of acquired intangibles amortisation | (1,434) | (1,434) |
CIT credit relating to 2021 2 | (1,830) | - |
Adjusted net income | 44,992 | 37,979 |
1
Including acquired intangibles amortisation of €16,208 thousand (€16,989 thousand in 2023).
2
See note 10 (d) for more information
3. Material accounting policy information
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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90
91
FINANCIAL STATEMENTS
Adjusted basic EPS | 2024 | 2023 |
Adjusted net income (€ thousands) | 44,992 | 37,979 |
Weighted average number of ordinary shares (note 11) | 489,975,882 | 496,082,891 |
Adjusted basic EPS (€ cents) | 9.18 | 7.66 |
| 2024 | 2023 | |
Net debt | (€ thousands) | (€ thousands) |
Bank loan principal amount (note 19) | 50,000 | 70,000 |
Customer credit balances | 2,398 | 2,363 |
Total Debt | 52,398 | 72,363 |
Cash and cash equivalents | (24,857) | (27,070) |
Net Debt | 27,541 | 45,293 |
2024 | 2023 | |
Leverage | (€ thousands) | (€ thousands) |
Net debt | 27,541 | 45,293 |
EBITDA | 55,255 | 46,045 |
Leverage | 0.50 | 0.98 |
2024 | 2023 | |
Cash conversion | (€ thousands) | (€ thousands) |
EBITDA | 55,255 | 46,045 |
Acquisition of intangible assets and property, plant and | ||
equipment | (306) | (251) |
54,949 | 45,794 | |
Cash conversion | 99% | 99% |
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the
chief operating decision maker (“CODM”) in order to allocate resources to the segments and to assess their performance. The CODM
has been identified as the Board of Baltic Classifieds Group PLC.
The main focus of the Group is operating leading online classifieds platforms for automotive, real estate, jobs and services, and general
merchandise in the Baltics. The Group’s business is managed on a consolidated level. The Board views information for each classified
platform at a revenue level only and therefore the platforms are considered products but not a separate line of business or segment.
The Group considers itself a classified business operating in a well-defined and economically similar geographical area, the Baltic
countries. And therefore the Board views detailed revenue information but only views costs and profit information at a Group level. As
such, management concluded that BCG has one operating segment, which also represents one reporting segment.
The revenue break-down is disclosed by primary geographical markets, key revenue streams and revenue by business lines in accordance
with IFRS 15 in note 6.
Of the total intangible assets and goodwill, 69% (69% in 2023) is located in Lithuania, 30% (30% in 2023) in Estonia and 1% (1% in 2023)
In the following tables, revenue from contracts with customers is disaggregated by primary geographical markets, key revenue streams
and revenue by business lines.
Primary geographic markets | 2024 | 2023 |
(€ thousands) | (€ thousands) | |
Lithuania | 50,354 | 42,407 |
Estonia | 20,277 | 17,203 |
Latvia | 1,436 | 1,204 |
Total | 72,067 | 60,814 |
Key revenue streams | 2024 | 2023 |
(€ thousands) | (€ thousands) | |
Listings revenue | 64,612 | 53,750 |
- Listings revenue: B2C | 36,289 | 29,765 |
- Listings revenue: C2C | 28,323 | 23,985 |
Ancillary revenue 1 | 3,762 | 3,336 |
Advertising revenue | 3,693 | 3,728 |
Total | 72,067 | 60,814 |
2024 | 2023 | |
Revenue by business lines | (€ thousands) | (€ thousands) |
Auto | 27,543 | 22,236 |
- Listings revenue: B2C | 12,954 | 9,908 |
- Listings revenue: C2C | 10,032 | 8,167 |
- Ancillary revenue | 3,512 | 3,060 |
- Advertising revenue | 1,045 | 1,101 |
Real Estate | 18,036 | 15,044 |
- Listings revenue: B2C | 10,688 | 8,653 |
- Listings revenue: C2C | 5,432 | 4,494 |
- Ancillary revenue | 45 | 61 |
- Advertising revenue | 1,871 | 1,836 |
Jobs & Services | 13,849 | 11,790 |
- Listings revenue: B2C | 11,214 | 9,975 |
- Listings revenue: C2C | 2,593 | 1,788 |
- Ancillary revenue | - | - |
- Advertising revenue | 42 | 27 |
Generalist | 12,639 | 11,744 |
- Listings revenue: B2C | 1,433 | 1,229 |
- Listings revenue: C2C | 10,266 | 9,536 |
- Ancillary revenue | 205 | 215 |
- Advertising revenue | 735 | 764 |
Total | 72,067 | 60,814 |
Due to the large number of customers the Group serves, there are no individual customers whose revenue is greater than 10% of the
Group’s total revenue in all periods presented in these financial statements.
1
Ancillary revenue includes revenue from financial intermediation, subscription services, and other. Financial intermediation revenue accounts for 89% of the total ancillary revenue
for the year ending 30 April 2024 and 91% of the total ancillary revenue for the year ending 30 April 2023
4. Alternative performance measures (APMs)
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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93
FINANCIAL STATEMENTS
Contract liabilities
1
include consideration received in advance of the satisfaction of performance obligations. The movement in contract
liabilities is provided below:
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Opening balance | 3,714 | 2,982 |
Recognised in revenue in the period | ( 6,637) | (5,620) |
Advance consideration received | 7,564 | 6,352 |
Closing balance | 4,641 | 3,714 |
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Operating profit is after charging the following: | ||
Labour costs | (11,326) | (9,605) |
Depreciation and amortisation | (16,918) | (16,989) |
Advertising and marketing services | (1,040) | (971) |
IT expenses | (837) | (725) |
Impairment loss on trade receivables and contract assets | (50) | (79) |
Other | (3,584) | (3,398) |
(33,755) | (31,767) |
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Fees payable for audit services: | ||
Audit of the Company and consolidated financial statements 2 | (532) | (563) |
Audit of the Company’s subsidiaries pursuant to legislation | (191) | (197) |
Total audit remuneration | (723) | (760) |
The average number of persons employed (including Executive Directors but excluding 5 Non-Executive Directors) during the year was
150 (147 in 2023).
The average number of full-time equivalent persons employed (including Executive Directors but excluding 5 Non-Executive Directors)
during the year, analysed by category, was as follows:
2024 | 2023 | |
(number) | (number) | |
Administration | 129 | 125 |
Key Management Personnel (note 23) | 7 | 6 |
Total | 136 | 131 |
The aggregate payroll costs of these persons were as follows:
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Wages and salaries | (8,035) | (7,034) |
Social security costs | (812) | (726) |
(8,847) | (7,760) | |
Share-based payment costs (note 24) | (2,165) | (1,567) |
Total | (11,012) | (9,327) |
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Interest income | 237 | |
Other financial income | 1 | 7 |
Total finance income | 238 | 7 |
Interest expenses | (3,516) | (2,602) |
Commitment and agency fees | (79) | (80) |
Other financial expenses | (16) | (1) |
Interest unwind on lease liabilities | (38) | (15) |
Total finance expenses | (3,649) | (2,698) |
Net finance costs recognised in profit or loss | (3,411) | (2,691) |
a) Tax recognised in profit or loss
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Current tax expense | ||
Current year | (5,928) | (4,904) |
Adjustments for current tax of prior periods 1 | 1,834 | - |
Deferred tax expense | ||
Change in deferred tax | 1,216 | 1,754 |
Tax expense | (2,878) | (3,150) |
Tax losses can be transferred between companies within the same tax group effectively reducing consolidated income tax expense.
b) Factors affecting the tax expense for the year
The table below explains the differences between the expected tax expense and the Group’s total tax expense for each year.
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Profit before tax | 34,926 | 26,365 |
Tax charge at weighted average rate (2024: 11%; 2023:11%) | (3,726) | (2,988) |
Non-deductible expenses | (305) | (127) |
Current year losses for which no deferred tax asset is recognised | (332) | |
Recognition of previously unrecognised (derecognition of previously | (349) | (85) |
recognised) deductible temporary differences | ||
Prior year adjustments 1 | 1,834 | 50 |
(2,878) | (3,150) |
Summary of taxation rates by country is presented below:
2024 | 2023 | |
United Kingdom 2 | 25% | 25% |
Lithuania | 15% | 15% |
Latvia 3 | 20% | 20% |
Estonia 3 | 20% | 20% |
1
Includes €1,830 thousand credit which relates to CIT for 2021. See note 10 (d) for further details.
2
Standard Corporate Income Tax rate in United Kingdom was 19% until March 2023. From April 2023, the Standard Corporate Income Tax rate increased to 25%, with the rate for
profits under £50,000 remaining at 19%.
3
0% income tax rate applies in Estonia and Latvia if there are no profit distributions, which results in a lower weighted average rate for the Group compared to the standard taxation
rates in each country.
6. Revenue
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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95
FINANCIAL STATEMENTS
For the year ended | Net balance at | Recognised in | Recognised in | Net balance at | Deferred tax | Deferred tax | |
30 April 2023: | 30 April 2022 | profit or loss | equity 2 | Reclassification | 30 April 2023 | asset | liability |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Intangible assets | (6,261) | 1,434 | - | - | (4,827) | - | (4,827) |
amortisation | |||||||
Capitalized | - | (64) | - | - | (64) | - | (64) |
borrowing costs | |||||||
Tax losses | - | 153 | - | - | 153 | 153 | - |
Other temporary | 417 | 231 | 20 | - | 668 | 668 | - |
differences | |||||||
Tax assets | (5,844) | 1,754 | 20 | - | (4,070) | 821 | (4,891) |
(liabilities) before | |||||||
set-off | |||||||
Set-off of tax 1 | - | - | - | - | - | (668) | 668 |
Net tax assets | (5,844) | 1,754 | 20 | - | (4,070) | 153 | (4,223) |
(liabilities) | |||||||
For the year ended | Net balance at | Recognised in | Recognised | Net balance at | Deferred tax | Deferred tax | |
30 April 2024: | 30 April 2023 | profit or loss | in equity 2 | Reclassification | 30 April 2024 | asset | liability |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Intangible assets | (4,827) | 1,434 | - | (102) | (3,495) | - | (3,495) |
amortisation | |||||||
Capitalized | (64) | 20 | - | - | (44) | - | (44) |
borrowing costs | |||||||
Tax losses | 153 | (153) | - | - | - | - | - |
Other temporary | 668 | (85) | (20) | 102 | 665 | 665 | - |
differences | |||||||
Tax assets | (4,070) | 1,216 | (20) | - | (2,874) | 665 | (3,539) |
(liabilities) before | |||||||
set-off | |||||||
Set-off of tax 1 | - | - | - | - | - | (665) | 665 |
Net tax assets | (4,070) | 1,216 | (20) | - | (2,874) | - | (2,874) |
(liabilities) |
d) Unrecognised deferred tax assets and liabilities
Deferred tax assets have not been recognised in respect to the tax losses incurred by UAB Antler Group prior to being eligible for transfer
to other Group companies in Lithuania and by BCG Holdco Limited in United Kingdom, because it is not probable that future taxable
profit will be available against which the Group can use the benefits therefrom.
Until December 2023, the Lithuanian Tax Authority (LTA) maintained that a tax group, and thus the sharing of tax losses with a group
company earning taxable profits, could only be established two years after companies became part of the same group. However, a
court ruling on 13 December 2023 found this interpretation of Article 56(1), Paragraph 1 of the Corporate Income Tax Law incorrect. The
decision is final. Following the ruling, CIT declarations for 2020-2021 were updated with a tax loss of €12,200 thousand being transferred
from UAB Antler Group to UAB Diginet LTU, resulting in a €1,830 thousand CIT overpayment by UAB Diginet LTU.
2024 | 2023 | |||
(€ thousands) | (€ thousands) | |||
Gross amount | Tax effect | Gross amount | Tax effect | |
Tax losses | (16,911) | 2,652 | (26,229) | 3,934 |
(16,911) | 2,652 | (26,229) | 3,934 | |
The aggregate amount of temporary differences associated with investments in subsidiaries for which deferred tax liabilities have not
been recognised is €9,092 thousand (€7,270 thousand in 2023). No deferred tax liability has been recognised as the Company is able
to control the timing of distributions from these subsidiaries and is not expected to distribute these profits in the foreseeable future.
1
Set-off is allowed as it is the same jurisdiction (Lithuania).
2
Taxation on items taken directly to equity relates to share-based payments.
e) Tax losses carried forward
Tax losses carried forward for which no deferred tax asset has been recognised were incurred by the Company’s indirect subsidiary UAB
Antler Group prior to being eligible for transfer to other Group companies in Lithuania and by BCG Holdo Limited in United Kingdom.
According to Lithuanian legislation, deductible tax losses carried forward can be used to reduce the taxable income earned during the
reporting year by maximum 70% of respective legal entity with no Group relief benefit. Tax losses can be carried forward for an indefinite
period, except for the losses incurred as a result of disposal of securities and/or derivative financial instruments. Such carrying forward
is disrupted if the Group and the Company stops its activities due to which these losses were incurred except when the Group and
the Company does not continue its activities due to reasons which do not depend on the Company itself. The losses from disposal of
securities and/or derivative financial instruments can be carried forward for 5 consecutive years and can only be used to reduce the
taxable income earned from transactions of the same nature.
Tax losses carried forward by expiration:
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Do not expire | (16,911) | (26,229) |
Total | (16,911) | (26,229) |
2024 | 2023 | |
Weighted average number of shares outstanding | 489,975,882 | 496,082,891 |
Dilution effect on the weighted average number of shares | 928,407 | 279,681 |
Diluted weighted average number of shares outstanding | 490,904,289 | 496,362,572 |
Profit for the period (€ thousands) | 32,048 | 23,215 |
Basic earnings per share (€ cents) | 6.54 | 4.68 |
Diluted earnings per share (€ cents) | 6.53 | 4.68 |
In calculating diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially
dilutive shares. The Group’s potentially dilutive instruments are in respect of share-based incentives granted to employees. Options
under the Performance Share Plan (note 24) are contingently issuable shares and are therefore only included within the calculation of
diluted EPS if the performance conditions are satisfied.
The average market value of the Group’s shares for the purposes of calculating the dilutive effect of share-based incentives was based
on quoted market prices during the period which the share-based incentives were outstanding.
The reconciliation of the weighted average number of shares is provided below:
2024 | 2023 | |
Number of shares | Number of shares | |
Issued ordinary shares at 1 May less ordinary shares held by EBT | 493,363,165 | 498,292,405 |
Weighted effect of ordinary shares purchased by EBT | - | (1,114,685) |
Weighted effect of share-based incentives | 196,255 | - |
Weighted effect of own shares purchased for cancellation | (3,583,538) | (1,094,829) |
Weighted average number of ordinary shares at 30 April | 489,975,882 | 496,082,891 |
10. Income taxes
continued
10. Income taxes
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
96
97
FINANCIAL STATEMENTS
Other | |||||
Trademarks | Relationship | intangible | |||
Goodwill | and domains | with clients | assets | Total | |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Cost | |||||
Balance at 30 April 2022 | 328,732 | 63,220 | 50,710 | 1,324 | 443,986 |
Acquisitions | 1,229 | 120 | 250 | - | 1,599 |
Disposals | - | - | - | (33) | (33) |
Balance at 30 April 2023 | 329,961 | 63,340 | 50,960 | 1,291 | 445,552 |
Disposals | - | - | - | (45) | (45) |
Balance at 30 April 2024 | 329,961 | 63,340 | 50,960 | 1,246 | 445,507 |
Accumulated amortisation and impairment losses | |||||
Balance at 30 April 2022 | - | 17,016 | 25,956 | 525 | 43,497 |
Amortisation | - | 6,332 | 9,866 | 257 | 16,455 |
Disposals | - | - | - | (33) | (33) |
Balance at 30 April 2023 | - | 23,348 | 35,822 | 749 | 59,919 |
Amortisation | - | 6,334 | 9,874 | 126 | 16,334 |
Disposals | - | - | - | (45) | (45) |
Balance at 30 April 2024 | - | 29,682 | 45,696 | 830 | 76,208 |
Carrying amounts | |||||
Balance at 30 April 2022 | 328,732 | 46,204 | 24,754 | 799 | 400,489 |
Balance at 30 April 2023 | 329,961 | 39,992 | 15,138 | 542 | 385,633 |
Balance at 30 April 2024 | 329,961 | 33,658 | 5,264 | 416 | 369,299 |
Impairment testing for cash generating units containing goodwill
The following carrying amounts of goodwill are allocated to each cash-generating unit within the Group:
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Diginet LTU UAB | 228,515 | 228,515 |
AllePal OÜ | 82,297 | 82,297 |
Kinnisvaraportaal OÜ | 13,976 | 13,976 |
City24 SIA | 3,998 | 3,998 |
VIN Solutions OÜ | 1,175 | 1,175 |
329,961 | 329,961 |
Testing for impairment is performed at the cash-generating unit (“CGU”) level, which is the smallest groups of assets that generate cash
inflows. The CGUs are legal entities based in Lithuania, Estonia and Latvia and the recoverable amounts of each CGU is determined
based on the value in use calculations that use cash flow projections based on the five-year financial forecasts.
The Group has prepared cash flows with the first year in the forecasts from the official budget approved by the Board, with the remaining
years forecast prepared by management. After this period, cash flows have been extrapolated using a growth rate of 4-5% (2023: 2.5%)
which, in 2024, is the long-term GDP growth rate for the relevant markets and takes into account longer-term considerations such as
expected Group performance and market developments. The cash flow forecasts have been discounted using a pre-tax discount rate of
15-17% (2021: 12-14%). The recoverable amount of goodwill shows significant headroom compared with its carrying amount, hence no
impairment charge was recorded in the year ended 30 April 2024 (2023: None).
Management has analysed a number of sensitivity scenarios when performing the impairment reviews, including a reduction in revenue
growth, increased discount rate and decreased terminal growth. None of those scenarios resulted in an impairment to goodwill.
Management considers that no reasonably possible change in the key assumptions would cause a material impairment in goodwill's
Buildings | Vehicles | Other | Total | |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Cost | ||||
Balance as at 30 April 2022 | 1,026 | 188 | 44 | 1,258 |
Acquisitions | 56 | - | - | 56 |
Disposals | (159) | - | - | (159) |
Re-assessment | 731 | 1 | - | 732 |
Balance as at 30 April 2023 | 1,654 | 189 | 44 | 1,887 |
Acquisitions | 89 | - | - | 89 |
Disposals | (8) | - | - | (8) |
Re-assessment | 489 | - | 21 | 510 |
Balance as at 30 April 2024 | 2,224 | 189 | 65 | 2,478 |
Accumulated depreciation and impairment losses | ||||
Balance as at 30 April 2022 | 676 | 102 | 23 | 801 |
Depreciation | 260 | 37 | 14 | 311 |
Disposals | (109) | - | - | (109) |
Balance as at 30 April 2023 | 827 | 139 | 37 | 1,003 |
Depreciation | 283 | 26 | 18 | 327 |
Disposals | (5) | (5) | ||
Balance as at 30 April 2024 | 1,105 | 165 | 55 | 1,325 |
Carrying amounts | ||||
Balance at 30 April 2022 | 350 | 86 | 21 | 457 |
Balance at 30 April 2023 | 827 | 50 | 7 | 884 |
Balance at 30 April 2024 | 1,119 | 24 | 10 | 1,153 |
Certain lease rentals include extension options. The lease re-assessment relate to lease term extension of Tallinn office space in 2024
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Trade receivables | 4,071 | 3,322 |
Expected credit loss on trade receivables | (48) | (45) |
Prepayments | 225 | 175 |
Other short-term receivables | 224 | 70 |
Total | 4,472 | 3,522 |
Trade and other receivables are non-interest bearing. The Group has recognized impairment losses in the amount of €48 thousand as at
30 April 2024 (€45 thousand as at 30 April 2023). Change in impairment losses for trade receivables, netted with recoveries, for financial
year amounted to €50 thousand as at 30 April 2024 and €79 thousand as at 30 April 2023. As at 30 April 2023 and 30 April 2022, there
are no pledges on trade receivables.
Reconciliation of changes in impairment allowance for trade receivables:
(€ thousands) | |
Balance as at 30 April 2022 | (71) |
Recoveries | 70 |
Write offs | 105 |
Changes in allowance and allowance recognised for new financial assets originated | (149) |
Balance as at 30 April 2023 | (45) |
Recoveries | 57 |
Write offs | 47 |
Changes in allowance and allowance recognised for new financial assets originated | (107) |
Balance as at 30 April 2024 | (48) |
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
98
99
FINANCIAL STATEMENTS
The balance of the Group’s cash and cash equivalents as at 30 April 2024 and 30 April 2023 comprises of cash in banks. The credit rating
of banks the Group holds its cash and cash equivalents varies from Aa3 to Baa3 as per Moody’s ratings.
Share capital | Share premium | ||
Number | amount | amount | |
of shares | (€ thousands) | (€ thousands) | |
Balance as at 30 April 2022 | 500,392,405 | 5,822 | - |
Purchase and cancellation of own shares | (3,429,240) | (39) | - |
Balance as at 30 April 2023 | 496 963 165 | 5,783 | 0 |
Purchase and cancellation of own shares | (8,018,738) | (93) | - |
Balance as at 30 April 2024 | 488,944,427 | 5,690 | 0 |
Included within shares in issue at 30 April 2024 are 3,356 thousand (3,600 thousand as at 30 April 2023) shares held by the Employee
Shares held by EBT | ||
Amount | Number | |
(€ thousands) | (€ thousands) | |
Balance as at 30 April 2022 | 3,418 | 2,100 |
Purchase of shares for performance share plan 1 | 2,834 | 1,500 |
Balance as at 30 April 2023 | 6,252 | 3,600 |
Exercise of share options | (398) | (244) |
Balance as at 30 April 2024 | 5,854 | 3,356 |
Dividends paid by the Company were as follows:
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
2022 final dividend | - | 6,955 |
2023 interim dividend | - | 3,963 |
2023 final dividend | 8,359 | - |
2024 interim dividend | 4,893 | |
Total | 13,252 | 10,918 |
Total dividends per share for the periods to which they relate are:
2024 | 2023 | |
(€ cents per share) | (€ cents per share) | |
2023 interim dividend | - | 0.8 |
2023 final dividend | - | 1.7 |
2024 interim dividend | 1.0 | - |
2024 final dividend | 2.1 | - |
Total | 3.1 | 2.5 |
the Annual General Meeting (‘AGM’) and hence has not been included as a liability in the financial statements. The 2024 final dividend
will be paid on 18 October 2024 to shareholders on the register at the close of business on 13 September 2024 and the payment will
comprise approximately €10,200 thousand of cash.
The Directors intend to return one third of Adjusted net income (as defined and reconciled in note 4) each year via an interim and final
dividend, split one third and two thirds, respectively. Adjusted net income (as reconciled in note 4) for 2024 was €44,992 thousand
2024 | 2023 | |
Non-current liabilities | (€ thousands) | (€ thousands) |
Bank loan | 49,122 | 68,716 |
Lease liabilities | 819 | 515 |
49,941 | 69,231 | |
2024 | 2023 | |
Current liabilities | (€ thousands) | (€ thousands) |
Bank loan | 93 | 180 |
Lease liabilities | 263 | 282 |
356 | 462 |
Bank loan:
Amount | |||||
Period end | Maturity | Loan currency | Effective interest rate | (€ thousands) | |
Bank Loan | 30 April 2023 | 2026 July | € | 2.91% | 68,896 |
Bank Loan | 30 April 2024 | 2026 July | € | 5.59% | 49,215 |
As at 30 April 2024 the undrawn revolving credit facility amounted to €10,000 thousand (€10,000 thousand as at 30 April 2023).
The loan agreement prescribes a Total Leverage Ratio covenant. Total Leverage Ratio is calculated as Net Debt over last twelve months
(LTM) of Adjusted EBITDA and shall not exceed 5.50:1. As at 30 April 2024 and 30 April 2023, the Group complied with the covenant
prescribed in the loan agreement.
As per the same agreement, the interest margin for each facility is tied to the Total Leverage Ratio at each interest calculation date on a
semi-annual basis. The interest rate margin is 1.75% when the leverage ratio is equal or below 2.5, and gradually increase when leverage
ratio increase. The interest rate margin applicable for the Group was 1.75% for the years ended 30 April 2024 and 30 April 2023.
The following pledges and securities were granted as of 30 April 2024 and 30 April 2023: group companies shares. The carrying amount
of pledged assets is as follows:
2024 | 2023 | |
Pledged assets | (€ thousands) | (€ thousands) |
Group companies shares 1 | 332,227 | 332,227 |
332,227 | 332,227 |
1
As defined in the loan agreement, the pledged assets include the shares held by Group companies (see the full list of subsidiaries in note 26):
•
the shares of UAB Antler Group that are held by BCG HoldCo Limited;
•
the shares of Baltics Classifieds Group OÜ and UAB Diginet LTU that are held by UAB Antler Group;
•
the shares of AllePal OÜ that are held by Baltics Classifieds Group OÜ.
18. Dividends
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
100
101
FINANCIAL STATEMENTS
Borrowings | Lease liabilities | Total | ||
(€ thousands) | (€ thousands) | (€ thousands) | ||
Balance as at 30 April 2022 | 82,432 | 369 | 82,801 | |
Changes from financing cash flows | ||||
• - Repayment of borrowings | (14,000) | - | (14,000) | |
• - Payment of lease liabilities | - | (247) | (247) | |
Total changes from financing cash flows | (14,000) | (247) | (14,247) | |
Other liability related changes | ||||
• - New leases and lease-reassessments | - | 721 | 721 | |
• - Lease disposal | - | (46) | (46) | |
• - Interest expenses | 2,602 | 15 | 2,617 | |
• - Interest paid | (2,138) | (15) | (2,153) | |
Total other liability related changes | 464 | 675 | 1,139 | |
Balance as at 30 April 2023 | 68,896 | 797 | 69,693 | |
Balance as at 30 April 2023 | 68,896 | 797 | 69,693 | |
Changes from financing cash flows | ||||
• - Repayment of borrowings | (20,000) | - | (20,000) | |
• - Payment of lease liabilities | - | (305) | (305) | |
Total changes from financing cash flows | (20,000) | (305) | (20,305) | |
Other liability related changes | ||||
• - New leases and lease-reassessments | - | 593 | 593 | |
• - Lease disposal | - | (3) | (3) | |
• - Interest expenses | 3,516 | 38 | 3,554 | |
• - Interest paid | (3,197) | (38) | (3,235) | |
Total other liability related changes | 319 | 590 | 909 | |
Balance as at 30 April 2024 | 49,215 | 1,082 | 50,297 |
2024 | 2023 | |
(€ thousands) | (€ thousands) | |
Trade payables | 399 | 299 |
Accrued expenses | 437 | 391 |
Payroll related liabilities | 1,134 | 1,021 |
Other tax | 1,668 | 1,326 |
Customer credit balances | 2,398 | 2,363 |
Other payables | 224 | 130 |
6,260 | 5,530 |
In its activities, the Group is exposed to various financial risks: market risk (including interest rate risk), credit risk and liquidity risk. The
Directors are responsible for creation and control of overall risk management policy in the Group.
Risk management policies are established to identify and analyse the risks faced by the Group, and to set appropriate risk limits and
controls. Risk management policies and systems are reviewed on a regular basis to reflect changes in the market conditions and
the Group‘s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees understand their roles and obligations. From time to time, the Group may use
derivative financial instruments in order to hedge against certain risks.
The note below presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing the risk, and the Group’s management of capital.
Credit risk is the risk of Group's financial loss if a customer or counterparty fails to comply with contractual obligations. Credit risk is
controlled by applying credit limits depending on the risk profile of the customer and monitoring debt collection procedures.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting
date was as follows:
2024 | 2023 | ||
Note | (€ thousands) | (€ thousands) | |
Trade receivables | 14 | 4,023 | 3,277 |
Other short-term receivables | 14 | 224 | 70 |
Cash and cash equivalents | 15 | 24,857 | 27,070 |
29,104 | 30,417 |
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also
considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and
country in which customers operate.
Credit risk related to loans receivable is managed by monitoring counterparty’s profitability and their cash flow projections. Credit risk
related to cash and cash equivalent balances is managed by monitoring credit ratings of the Group’s banks.
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including
but not limited to external ratings, audited consolidated financial statements, management accounts and cash flow projections and
available press information about customers) and applying experienced credit judgement.
Credit risk grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to
external credit rating definitions from agencies.
An ECL rate is calculated based on delinquency status and actual credit loss experience over the past three years. These rates are
multiplied by scalar factors to reflect differences between economic conditions during the period over which the historical data has
been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables.
The trade receivables do not have a significant financing component. The Group’s credit terms on sales to business customers are 7-60
days from receipt of the invoice by the customer. For sales to private customers, the Group collects payments instantly at the time of
the transaction and is not exposed to credit risk.
The Group applies the simplified approach for trade receivables.
The Group has elected to use a provision matrix to calculate lifetime ECLs, which is based on:
•
Historical default rates over the expected life of the trade receivables
•
Adjustment for forward-looking estimates
Impairment allowance – analysis as at 30 April 2024:
Trade receivables | Impairment allowance | ||
ECL rate | (€ thousands) | (€ thousands) | |
Not past due | (0.1%) | 3,161 | (3) |
1 – 30 days past due | (0.5%) | 492 | (2) |
31 – 60 days past due | (2.1%) | 127 | (3) |
61 – 90 days past due | (5.7%) | 48 | (3) |
> 90 days past due | (15.4%) | 243 | (37) |
(1.2%) | 4,071 | (48) |
Impairment allowance – analysis as at 30 April 2023:
Trade receivables | Impairment allowance | ||
ECL rate | (€ thousands) | (€ thousands) | |
Not past due | (0.1%) | 2,701 | (4) |
1 – 30 days past due | (0.7%) | 313 | (2) |
31 – 60 days past due | (3.0%) | 72 | (2) |
61 – 90 days past due | (6.0%) | 26 | (2) |
> 90 days past due | (16.8%) | 210 | (35) |
(1.4%) | 3,322 | (45) |
21. Financial risk management
continued
19. Loans and borrowings
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
102
103
FINANCIAL STATEMENTS
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group‘s policy is to maintain sufficient amounts of cash and cash equivalents via operations, borrowings and credit facilities to
meet its commitments at a given date. This policy excludes the potential impact of extreme circumstances that cannot be reasonably
predicted, such as natural disasters.
Cash flow budgeting is performed by the Group’s management and the Group’s liquidity requirements are monitored to ensure it has
sufficient cash to meet operational needs.
The Group has access to a credit facility with the current lender at a total of EUR 60 000 thousand. All of the commitment matures in
July 2026. At 30 April 2024, EUR 50 000 thousand was drawn under the credit facilities available. The undrawn revolving credit facility
amounted to €10,000 thousand. The covenant of this credit facility is discussed in note 19.
The table below summarises the remaining contractual maturities of financial liabilities as at 30 April of 2024, including estimated
interest payments:
Financial | Carrying | Contractual | More than | |||
liabilities | amount | cash flows | Up to 1 year | 1-2 years | 2-5 years | 5 years |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Bank loan | 49,215 | (56,371) | (2,896) | (2,881) | (50,594) | - |
Lease liabilities | 1,082 | (1,313) | (317) | (294) | (654) | (48) |
Trade payables | 399 | (399) | (399) | - | - | - |
Other payables | 2,622 | (2,622) | (2,622) | - | - | - |
53,318 | (60,705) | (6,234) | (3,175) | (51,248) | (48) |
The table below summarises the remaining contractual maturities of the Group’s financial liabilities as at 30 April of 2023, including
estimated interest payments:
Financial | Carrying | Contractual | More than | |||
liabilities | amount | cash flows | Up to 1 year | 1-2 years | 2-5 years | 5 years |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Bank loan | 68,896 | (80,828) | (3,340) | (3,345) | (74,143) | - |
Lease liabilities | 797 | (895) | (286) | (198) | (411) | - |
Trade payables | 299 | (299) | (299) | - | - | - |
Other payables | 2,493 | (2,493) | (2,493) | - | - | - |
72,485 | (84,515) | (6,418) | (3,543) | (74,554) | - |
Market risk is the risk that changes in market prices - such as 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 optimizing the return.
i) Currency risk
EUR is the functional currency of each legal entity comprising the Group, as well as the Group’s reporting currency. The Group is exposed
to currency risk on purchases that are denominated in a currency other than EUR.
The Group is not using any financial instruments to hedge against the foreign currency exchange risk.
As at 30 April 2024 and 30 April 2023, the Group had no significant monetary assets and liabilities denominated in other currencies.
ii) Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group has no
significant interest-bearing assets.
At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments was as follows:
2024 | 2023 | |
Carrying amount | (€ thousands) | (€ thousands) |
Instruments with a variable interest rate | ||
Bank loan | 49,122 | 68,716 |
49,122 | 68,716 |
Cash flow sensitivity analysis for variable rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and
profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.
2024 | Impact of financial instruments on profit before tax | |||
Financial instruments by class | Increase | Impact to finance costs | Impact to finance costs | |
(€ thousands) | Decrease | (€ thousands) | ||
Variable rate instruments | +100 bp | (500) | -100 bp | 500 |
2023 | Impact of financial instruments on profit before tax | |||
Impact to finance costs | Impact to finance costs | |||
Financial instruments by class | Increase | (€ thousands) | Decrease | (€ thousands) |
Variable rate instruments | +100 bp | (700) | -100 bp | 700 |
Equity in combination with net debt is considered to be capital for capital management purposes. The Group’s policy is to maintain
the confidence of creditors and the market, to fund business development opportunities in the future and comply with external capital
The Group’s principal financial instruments not carried at fair value are trade and other receivables, trade and other payables, non-
current and current borrowings.
The management of the Group is of the opinion that carrying amount of trade and other receivables, trade and other payables is a
reasonable approximation of fair value due to their short-term nature.
Based on the discounted cash flow analysis performed, management considers that the borrowings carrying amount is a reasonable
approximation of fair value. The discounted cash flow analysis was performed using a market rate of interest and principal payments
discounted to a present value using interest rate as a discount rate.
A number of the Group’s accounting policies and disclosures require determination of fair value, for both financial and non-financial
assets and liabilities.
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
The Group recognised transfers between the fair value hierarchy from the end of the reporting period in which the change occurred.
Below listed are financial assets and financial liabilities:
| 2024 | Carrying amount | Level 1 | Level 2 | Level 3 | Total |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Trade and other receivables | 4,247 | - | - | - | - |
Cash and cash equivalents | 24,857 | - | - | - | - |
Loans and borrowings | (49,215) | - | (49,215) | - | (49,215) |
Trade and other payables | (5,126) | - | - | - | - |
(25,237) | - | (49,215) | - | (49,215) | |
| 2023 | Carrying amount | Level 1 | Level 2 | Level 3 | Total |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Trade and other receivables | 3,347 | - | - | - | - |
Cash and cash equivalents | 27,070 | - | - | - | - |
Loans and borrowings | (68,896) | - | (68,896) | - | (68,896) |
Trade and other payables | (4,509) | - | - | - | - |
(42,988) | - | (68,896) | - | (68,896) |
21. Financial risk management
continued
21. Financial risk management
continued
Notes to the Consolidated Financial Statements
continued
Notes to the Consolidated Financial Statements
continued
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
104
105
FINANCIAL STATEMENTS
During the period ended 30 April 2024 and period ended 30 April 2023, the transactions with related parties outside the consolidated
Group consisted of remuneration of key management personnel (note 23), including share option awards under the PSP scheme (note
payments
Key management personnel comprises 3 Executive directors (CEO, CFO, COO), 5 Non-Executive Directors, Group Development Director
and Directors of Group companies. Remuneration of key management personnel in the reporting year, including social security and
related accruals, amounted to €1,610 thousand for the period ended 30 April 2024 and €1,257 thousand for the period ended 30 April
2023. Share-based payments amounted to €1,666 thousand for the period ended 30 April 2024 and €1,031 thousand for the period
ended 30 April 2023.
During the period ended 30 April 2024 the Executive directors of the Group were granted a set number of share options under the PSP
scheme. See note 24 for further detail.
During the year ended 30 April 2024 and 30 April 2023, key management personnel of the Group did not receive any loans, guarantees,
Performance Share Plan
The Group currently operates a Performance Share Plan (PSP) that is subject to a service and a non-market performance condition. The
estimate of the fair value of the PSP is measured using Black-Scholes pricing model.
The total charge in the period relating to the PSP scheme was €2,165 thousand (€1,567 thousand in the period ended 30 April 2023).
On 5 July 2023, the Group awarded 1,138,024 share options under the PSP scheme. These awards have a 3-year service condition and
performance condition which is measured by reference to the Group's earnings per share in the year ended 30 April 2026.
The fair value of the 2023 award was determined to be €2.14 per option using a Black-Scholes pricing model. The resulting share-based
payments charge is being spread evenly over the period between the grant date and the vesting date.
The assumptions used in the measurement of the fair value at grant date of the PSP awards are as follows:
Share price |
Exercise |
Expected |
Vesting |
Risk-free |
Dividend |
Fair value |
||
Grant |
at grant date |
price |
volatility |
period |
rate |
yield |
per option |
|
date |
Condition |
(€) |
(€) |
(%) |
(years) |
(%) |
(%) |
(€) |
27 July |
EPS performance condition, |
|||||||
| 2021 |
service condition |
2.62 |
0.01 |
53% |
3 |
(0.20)% |
0.78% |
2.56 |
12 July |
EPS performance condition, |
|||||||
2022 |
service condition |
1.49 |
0.01 |
69% |
3 |
1.37% |
1.96% |
1.40 |
12 July |
Service condition |
1.49 |
0.01 |
69% |
1 |
1.37% |
1.96% |
1.46 |
| 2022 |
||||||||
5 July |
EPS performance condition, |
|||||||
2023 |
service condition |
2.22 |
0.01 |
40% |
3 |
2.54% |
1.12% |
2.14 |
The expected volatility was determined using UK listed peers’ historical volatility average as at the date of option valuation own data
was not available due to a relatively recent Admission.
The number of options outstanding and exercisable as at 30 April 2024 was as follows:
2024 |
2023 |
|
(number) |
(number) |
|
Outstanding at beginning of year |
2,484,217 |
1,041,745 |
Options granted in the period |
1,138,024 |
1,465,911 |
Options exercised in the period |
(244,318) |
- |
Options forfeited in the period |
(24,436) |
(23,439) |
Outstanding at end of year |
3,353,487 |
2,484,217 |
On 18 April 2024, the Estonian Competition Authority ("ECA”) adopted two decisions terminating the supervisory proceedings against
the Groups two real estate online classified portals Kv.ee and City24.ee and against the automotive classified portal Auto24.ee. ECA
confirmed that the Group portals have not set unfairly high prices for the services they offer and have not abused the dominant positions
in the respective markets. As of 6 June 2024, the deadline to appeal the decisions has passed without any the appeals and decisions
came into full force.
As at 30 April 2024, the Group had one open enquiry from Competition Authorities, however the Directors’ view is that the likelihood of
any material outflow of resources in respect of these enquiries is remote, and therefore no provision or contingent liability has been
recognised in the financial statements in respect of these matters (no provision or liability in 2023).
The supervisory proceedings were initiated on 4 February 2022 by the ECA against AllePal OÜ, the operator of real estate online classified
portal, based on the complaint filed by Reales OÜ. Reales OÜ had entered into service agreement with AllePal OÜ for the insertion of
real estate ads on both of real estate online classified portals, and according to the complaint, AllePal OÜ unfairly refused to provide the
service to Reales OÜ by terminating the agreement. According to AllePal OÜ, service agreement was terminated because the claimant
used the services to provide real estate ads brokerage or aggregation services and did not engage in real estate brokerage, for which the
real estate online classifieds portals are intended. AllePal OÜ actively co-operates with the ECA and provides all necessary information
and holds negotiations with Reales OÜ in order to develop a suitable contract and the pricing for the service needed by the claimant.
On 15 March 2022, Reales OÜ submitted an additional complaint to initiate additional supervisory proceedings against the AllePal OÜ,
which alleges that the pricing difference between the prices offered to the business and private customers indicates the abuse of a
dominant position. On 1 April 2022 the ECA decided not to initiate additional proceedings and investigate the raised question within
the ongoing supervisory proceedings. As the ECA or any other Estonian authorities have not initiated any misdemeanour (or criminal)
proceedings against any Group company, the ongoing supervisory proceedings cannot lead to any imposition of fines to any Group
company, however, if the ECA concludes that AllePal OÜ and Kinnisvaraportaal OÜ abused their position, the ECA could issue a precept
ordering these Group companies to end any ongoing infringements. In October 2022, Group approached ECA and explained that Group
Registration |
Share in |
Held |
|||
Company name |
Registered office |
Number |
Activity |
capital |
directly? |
Highdown House, Yeoman |
|||||
Way, Worthing, West |
Acquiring |
||||
BCG HOLDCO Limited |
Sussex, United Kingdom, |
13415193 |
participations |
100% |
Yes |
BN99 3HH |
|||||
V. Nagevičiaus 3, Vilnius, |
Management and |
||||
UAB Antler Group |
Lithuania |
305147427 |
consulting services |
100% |
No |
Saltoniškių 9B-1, Vilnius, |
|||||
| UAB Diginet LTU |
Lithuania |
126222639 |
Online classifieds |
100% |
No |
| Pärnu mnt. 141, Tallinn, |
|||||
| OÜ AllePal |
Estonia |
12209337 |
Online classifieds |
100% |
No |
Pärnu mnt. 141, Tallinn, |
|||||
OÜ Kinnisvaraportaal |
Estonia |
10680295 |
Online classifieds |
100% |
No |
OÜ VIN Solutions |
Turu 2, Tartu, Estonia |
14071883 |
Information services |
100% |
No |
Pärnu mnt. 141, Tallinn, |
|||||
OÜ Baltic Classifieds Group |
Estonia |
14608656 |
Online classifieds |
100% |
No |
Gustava Zemgala 78 - 1, |
|||||
| SIA City24 |
Rīga, Latvia |
40003692375 |
Online classifieds |
100% |
No |
BCG HOLDCO Limited is exempt from the requirement to file audited accounts for the year ended 30 April 2024 by virtue of section 479A
A voluntary repayment of debt of €5,000 thousand was made on 13 May 2024 reducing the outstanding principal amount of bank
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
106
107
As at 30 April 2024
2024 | 2023 | ||
Notes | (€ thousands) | (€ thousands) | |
Fixed assets | |||
Investments | 4 | 511,796 | 509,631 |
Current assets | |||
Debtors: amounts falling due within one year | 5 | 103,691 | 98,854 |
Cash at bank or in hand | 6 | 3,062 | 103 |
Creditors: amounts falling due within one year | |||
Amounts due to subsidiary undertakings | 7 | (43,635) | (6,189) |
Other creditors | 7 | (510) | (336) |
Net current assets | 62,608 | 92,432 | |
Total assets less current liabilities | 574,404 | 602,063 | |
Capital and reserves | |||
Called up share capital | 10 | 5,690 | 5,783 |
Retained earnings | 574,436 | 602,493 | |
Capital redemption reserve | 132 | 39 | |
Own shares held | 11 | (5,854) | (6,252) |
Total Capital and reserves | 574,404 | 602,063 |
The profit for the year of the Company was €2,867 thousand (2023: profit €2,630 thousand).
The accompanying notes form part of these financial statements.
The financial statements of Baltic Classifieds Group PLC, Company number 13357598, were approved and authorized for issue by the
board and were signed on its behalf on 2 July 2024.
Justinas Šimkus
Director
Baltic Classifieds Group PLC
Registered number 13357598
Company Statement of Changes in Equity
Capital | ||||||
Called up | Share | Own | redemption | Retained | Total | |
share capital | premium | shares held | reserve | earnings | equity | |
(€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | (€ thousands) | |
Balance at 30 April 2022 | 5,822 | (3,418) | 614,990 | 617,394 | ||
Profit / (loss) for the period | - | - | - | - | 2,630 | 2,630 |
Other comprehensive income | - | - | - | - | - | - |
Total comprehensive income | - | - | - | - | 2,630 | 2,630 |
Transactions with owners: | ||||||
Purchase of shares for cancellation | (39) | - | - | 39 | (5,775) | (5,775) |
Dividends paid | - | - | - | - | (10,918) | (10,918) |
Share-based payments | - | - | - | - | 1,567 | 1,567 |
Acquisition of treasury shares | - | - | (2,834) | - | - | (2,834) |
Balance at 30 April 2023 | 5,783 | - | (6,252) | 39 | 602,493 | 602,063 |
Profit / (loss) for the period | - | - | - | - | 2,867 | 2,867 |
Other comprehensive income | - | - | - | - | - | - |
Total comprehensive income | - | - | - | - | 2,867 | 2,867 |
Transactions with owners: | ||||||
Share-based payments | - | - | - | - | 2,165 | 2,165 |
Exercise of share options | - | - | 398 | - | (395) | 3 |
Acquisition of treasury shares | - | - | - | - | - | - |
Purchase of shares for cancellation | (93) | - | - | 93 | (19,442) | (19,442) |
Dividends paid | - | - | - | - | (13,252) | (13,252) |
Balance at 30 April 2024 | 5,690 | - | (5,854) | 132 | 574,436 | 574,404 |
Set aside for dividends declared after | (10,200) | (10,200) | ||||
the reporting period | ||||||
Total | 564,236 | 564,204 | ||||
The accompanying notes form part of these financial statements.
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
108
109
Notes to the Company Financial Statements
1. Accounting policies
Baltic Classifieds Group PLC ("the Company") is a public company limited by shares, incorporated in England, United Kingdom on
the 26th of April 2021 with registration number 13357598 and listed on the London Stock Exchange. The Company is registered and
domiciled in the UK. Principal place of the business is Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99
3HH.
Statement of compliance and basis of preparation
These financial statements of Baltic Classifieds Group PLC were prepared in accordance with the Financial Reporting Standard 102 The
Financial Reporting Standard applicable in the UK and the Republic of Ireland ("FRS 102") and the Companies Act 2006.
The Company financial statements have been prepared under the historical cost convention, as modified for the revaluation of certain
financial assets and liabilities through profit or loss. The current year financial information presented is from 1 May 2023 to 30 April
2024.
The Company uses the Euro (EUR) as functional currency and presentation currency. Foreign currency transactions are translated
into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at month-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognized in the profit or loss for the period. Non-monetary items measured at fair
value are measured using the exchange rate when fair value was determined. The Company financial statements have been rounded to
the nearest thousand except where otherwise indicated.
As permitted by Section 408 of the Companies Act 2006, an entity profit and loss account is not included as part of the published
consolidated financial statements of Baltic Classifieds Group PLC. The profit for the financial period dealt with in the financial statements
of the parent company was €2,867 thousand (2023: €2,630 thousand).
The consolidated financial statements of Baltic Classifieds Group PLC are prepared in accordance with the UK adopted International
Financial Reporting Standards and are available to the public. In these financial statements, the Company is considered to be a qualifying
entity and has applied the exemptions available under FRS 102 in respect of the following disclosures:
•
statement of comprehensive income with related notes;
•
cash flow statement with related notes; and
•
key management personnel compensation.
Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following
reasons.
The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements which
indicate that Company will have sufficient funds to meet its liabilities as they fall due for that period.
In making this assessment the Directors have considered the fact that the Company’s activities are principally as a holding company
with long-term investments in subsidiaries funded by equity. The Company’s assets consist of investments in subsidiary undertakings,
and intercompany loan receivable balances.
Consequently, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due
for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a
going concern basis.
Significant accounting judgements and key sources of estimation uncertainty
In preparing the financial statements, management is required to make estimates and assumptions that affect the application of
policies and reported income, expenses, assets, and liabilities. Estimates and judgements are continually reviewed and are based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the current
circumstances. Actual results may differ from the initial estimate or judgement and any subsequent changes are accounted for with and
effect on the financial statements at the time such updated information becomes available. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised or in
any future periods affected. There are no significant judgements or key sources of estimation uncertainty for the Company.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial
statements.
Share-based payment transactions
Equity-settled awards are valued at the grant date.
Fair value of the awards are measured using Black-Scholes pricing model. In the
consolidated financial statements, on the assumption that the arrangement is equity-settled, the transaction is treated as an equity-
settled share-based payment, as the group has received services in consideration for the group’s equity instruments.
An expense is
recognised in the group income statement for the grant date fair value of the share-based payment over the vesting period, with a
credit recognised in equity. In the parent Company’s separate financial statements, there is no share-based payment charge, as no
employees are providing services to the parent. The parent would therefore record a debit, recognising an increase in the investment in
the subsidiaries as a capital contribution from the parent and a credit to equity. In the subsidiaries’ financial statements, the award is
treated as an equity-settled share-based payment. An expense for the grant date fair value of the award is recognised over the vesting
period, with a credit recognised in equity. The credit to equity is treated as a capital contribution, as the parent is compensating the
subsidiaries’ employees with no cost to the subsidiaries.
Investment in subsidiaries
These are separate financial statements of the Company. The cost method is applied to investments in other companies. The cost price
increases when funds are added through capital increase or when group contributions are made to subsidiaries.
Cash at bank or in hand
Cash includes cash at banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts
of cash with original maturities of three months or less and that are subject to an insignificant risk of change in value.
Taxation
The Company's profit for the period arises mostly from the receipt of BCG Holdco Limited intercompany loan interest income.
Any
interest income received by the company is taxable as a loan relationship. However, the corresponding expense on BCG Holdco Limited
should be deductible for tax purposes. Group relief allows losses to be surrendered from loss-making companies to profitable companies
in the same group. Given BCG Holdco Limited and Baltic Classifieds Group PLC are in the same group for group relief purposes and BCG
Holdco Limited would be able to surrender its losses to Baltic Classifieds Group PLC, there is no net tax payable as a result of the loan.
In addition, Baltic Classifieds Group PLC provides taxable supplies for management service to UAB Antler Group based on management
agreement, however incurred administration costs cover revenue and as a result, no provision for Corporation tax is needed in these
financial statements.
Own shares held by ESOP trust
Transactions of the Company-sponsored ESOP trust are treated as being those of the Company and are therefore reflected in the
Company financial statements.
In particular, the trust’s purchases and sales of shares in the Company are debited and credited directly
to equity.
Capital redemption reserve
The capital redemption reserve arises from the purchase and subsequent cancellation of the Group’s own equity share capital.
Financial instruments
The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
a) Financial assets
Basic financial assets, including trade and other receivables, cash and bank balances, loans to Group companies are initially recognized
at transaction price (unless the arrangement constitutes a financing transaction) and are subsequently carried at amortized cost using
the effective interest method.
b) Financial liabilities
Basic financial liabilities, including trade and other payables that are classified as debt, are initially recognized at transaction price,
unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future
receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortized cost, using the effective
interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current
liabilities. Trade payables are recognized initially at transaction price and subsequently measured at amortized cost using the effective
interest method.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the Group’s financial statements in the period in which
the dividend is approved by the Company’s shareholders in the case of final dividends, or the date at which they are paid in the case of
interim dividends.
2. Services provided by the Company’s auditor
2024
(€ thousands)
2023
(€ thousands)
Fees payable for audit services:
Audit of the Company and consolidated financial statements
(532)
(563)
Total audit remuneration
(532)
(563)
The total fees payable for audit of the Company and consolidated financial statements include €43 thousand (2023: €102 thousand)
audit fees relating to previous financial year. Refer to note 7 on page 92 in consolidated financial statements for further detail.
Notes to the Company Financial Statements
continued
1. Accounting policies
continued
FINANCIAL STATEMENTS
Baltic Classifieds Group PLC Annual Report and Accounts 2024
Baltic Classifieds Group PLC Annual Report and Accounts 2024
110
111
3. Directors’ remuneration
The Company has no employees other than the Directors.
The aggregate remuneration of the directors was €345 thousand (2023: €312 thousand).
During the year ended April 2024 and April 2023 Directors of the Company did not receive any loans, guarantees, no other payments or
property transfers occurred and no pension or retirement benefits were paid.
4. Investment in subsidiaries
(€ thousands)
Investment in subsidiaries at 30 April 2022
508,064
Share-based payments
1,567
Investment in subsidiaries at 30 April 2023
509,631
Share-based payments
2,165
Investment in subsidiaries at 30 April 2024
511,796
Additions to share based payments in the year and prior year relate to equity-settled share-based payments granted to the employees of
subsidiary companies. Subsidiary undertakings are disclosed within note 24 to the consolidated financial statements.
The closing balance of the Investment in subsidiaries at 30 April 2024 consists of €506,452 thousand investment in BCG Holdco Limited
and Share based payments in amount to €5,344 thousand. No impairment indicators were identified for the investment in subsidiaries.
5. Debtors: amounts falling due within one year
2024
(€ thousands)
2023
(€ thousands)
Intercompany loan and interests to BCG HoldCo Limited
103,444
98,733
Amounts owed by subsidiary undertakings
49
-
Other short-term receivables
198
121
103,691
98,854
Terms, repayment of intercompany loan
The loan is repayable immediately on demand by the lender. The borrower may prepay or repay any or all of the Loan at any time and bear
interest at rate of 1.1% plus 1 month EURIBOR (2023: 2.5% plus 1 month EURIBOR) The loan is not expected to be paid within 1 year in
the course of the normal operating cycle.
6. Cash at bank or in hand
2024
(€ thousands)
2023
(€ thousands)
Cash at bank
3,062
103
3,062
103
There were no restrictions on cash at bank or in hand held at 30 April 2024 and 2023.
7. Creditors: amounts falling due within one year
2024
(€ thousands)
2023
(€ thousands)
Trade creditors
(76)
(11)
Share buybacks liability
(211)
(113)
Accruals
(223)
(212)
Intercompany loan and interests from Antler Group UAB
-
(6,189)
Intercompany loan and interests from Diginet LTU UAB
(43,635)
-
(44,145)
(6,525)
The loan is repayable immediately on demand by the lender, Diginet LTU UAB. The borrower may prepay or repay any or all of the loan
at any time and bear interest at a rate of 0.5% plus 1 month EURIBOR. The loan is not expected to be paid within 1 year in the course of
a normal operating cycle.
8. Financial instruments
Financial instruments utilized by the Company during the year ended 30 April 2024 may be analyzed as follows:
2024
(€ thousands)
2023
(€ thousands)
Financial assets measured at amortized cost
106,752
98,957
106,752
98,957
Financial assets specified and detailed disclosed in notes 5 and 6.
2024
(€ thousands)
2023
(€ thousands)
Financial liabilities measured at amortized cost
(44,145)
(6,525)
(44,145)
(6,525)
Financial liabilities specified and detailed disclosed in note 7.
Current assets and liabilities
Financial instruments included within current assets and liabilities (excluding cash and borrowings) are generally short term in nature
and accordingly their fair values approximate to their book values.
9. Financial risk management
In its activities, the Company is exposed to various financial risks: market risk (including interest rate risk), credit risk and liquidity risk.
The Board of Directors is responsible for creation and control of overall risk management policy in the Company.
Credit risk is the current or prospective risk to earnings and capital arising from a debtor’s BCG Holdco Limited failure to meet the terms
of intercompany loan with the Company or if a debtor otherwise fails to perform.
The credit risk on cash in banks is limited because the counterparties are banks with high credit-ratings assigned by international credit-
rating agencies. Cash in banks is the only financial asset exposed to credit risk. Barclays Bank UK PLC had a credit rating of Fitch A+,
Moody's A1 as at 30 April 2024. Swedbank Bank AB had a credit rating of Moody's Aa3 as at 30 April 2024.
The Company can take on exposure to market risk, which means the risk for the Company to incur losses due to the adverse fluctuations
in the market parameters such as interest rates (interest rate risk) and currency exchange rates (foreign currency risk).
Interest rate risk is the risk of experiencing losses because of unfavorable changes of interest rate. A company granting a loan with a
fixed interest will experience supposed losses (i.e., will get less income than it could get), if the interest rate on the market is going up,
and the company which has taken a loan will experience the supposed losses, if the interest rate goes down. In case a floating interest
rate is established in the contract, market fluctuations will have an impact on the financial income/expenses earned/incurred by the
parties involved. Since a floating interest rate is applied to the loan granted by the Company to BCG Holdco Limited, the Company and
BCG Holdco Limited bear the interest rate risk. Also a floating interest rate is applied to the loan granted to the Company by Diginet LTU
UAB, The Company and Diginet LTU UAB bear the interest rate risk.
Foreign currency exchange risk is associated with potential profit variability, which may be caused by fluctuations of foreign currencies
exchange rates. EUR is the functional currency of the Company. The Company is exposed to currency risk on purchases that are
denominated in a currency other than EUR. As at 30 April 2024 the Company has 227 thousand liabilities and 47 thousand cash at bank
account in GBP currency. As at 30 April 2023, the Company has 105 thousand liabilities and 4 thousand cash at bank account in GBP
currency.
Liquidity risk is understood as incapability to fulfil undertaken obligations in due time without experiencing unacceptable losses.
Bearing in mind that the Company, BCG Holdco Limited, Antler Group UAB and Diginet LTU UAB are related parties, the Company
assumes liquidity risk to the limited extent.
10. Share capital
Number of shares
Share capital
(€ thousands)
Capital
redemption reserve
(€ thousands)
As at 30 April 2022
500,392,405
5,822
-
Purchase and cancellation of own shares
(3,429,240)
(39)
39
As at 30 April 2023
496,963,165
5,783
39
Purchase and cancellation of own shares
(8,018,738)
(93)
93
As at 30 April 2024
488,944,427
5,690
132
In October 2022 the Company initiated its share buyback program. During 2024, the Company purchased 8,018,738 (2023: 3,429,240)
ordinary shares with a par value of £ 0.01 for cancellation. For this reason, a capital redemption reserve was formed in amount of €132
thousand as at 30 April 2024.
Fully paid ordinary shares, which have a par value of £0.01, carry one vote per share and carry a right to dividends.
Notes to the Company Financial Statements
continued
Notes to the Company Financial Statements
continued
ADDITIONAL INFORMATION
Baltic Classifieds Group PLC Annual Report and Accounts 2024
113
Baltic Classifieds Group PLC Annual Report and Accounts 2024
112
11. Own shares held
Shares held by EBT
Amount
(€ thousands)
Number
('000)
Balance as at 30 April 2022
(3,418)
2,100
Purchase of shares for performance share plan
(2,834)
1,500
Balance as at 30 April 2023
(6,252)
3,600
Balance as at 30 April 2023
(6,252)
3,600
Purchase of shares for performance share plan
-
-
Exercise of share options
398
(244)
Balance as at 30 April 2024
(5,854)
3,356
No shares purchased to EBT during 2024. During 2023, shares were purchased on 29 July 2022 and 2 August 2022 at a price of £1.54
(€1.842) and £1.619 (€1.943) per share respectively. Stamp duty reserve tax and broker commission amounting to €18 thousand were
capitalized to the cost.
12. Dividends
Dividends declared and paid by the Company were as follows:
Year ended 30 April 2024
Year ended 30 April 2023
€ cents per share
(€ thousands)
€ cents per share
(€ thousands)
2022 final dividend paid
-
-
1.4
6,955
2023 interim dividend paid
-
-
0.8
3,963
2023 final dividend paid
1.7
8,359
2024 interim dividend paid
1.0
4,893
13,252
10,918
The proposed final dividend for the year ended 30 April 2024 of 2.1 € cents per share, totaling approximately €10,200 thousand, is
subject to approval by Shareholders at the Annual General Meeting (“AGM”) and hence has not been included as a liability in the financial
statements. Dividends will be paid in euros however Shareholders will have an opportunity to opt for a payment in British pounds.
The 2023 final dividend of €8,359 thousand (1.7 € cents per qualifying share) was paid on 13 October 2023.
2024 interim dividend of €1.0 cents per share, totaling €4,893 thousand was paid out on 24 January 2024.
The terms of the EBT provide that dividends payable on the ordinary shares held by the EBT are waived.
Dividends are paid out of the available distributable reserves of the Company.
13. Related party transactions
During the year, a management charge of €499 thousand (2023: €474 thousand) was provided to UAB Antler Group in respect of services
rendered. During the year, an accounting and Cosec charge of €45 thousand (2023: €nil) was received from UAB Antler Group. At the
year end, balances outstanding with other Group undertakings were €103,493 thousand (2023: €98,733 thousand) for debtors as set
out in note 5 and €43,635 thousand (2023: €6,189 thousand) for creditors as set out in note 7. Related party transactions for Directors’
remuneration are disclosed in note 3 within note 23 to the consolidated financial statements.
14. Ultimate parent company and parent company of larger group
The Company is a parent and the ultimate controlling party. The largest group in which the results of the Company are consolidated is that
headed by Baltic Classifieds Group PLC (registered number 13357598) with registered office in Highdown House, Yeoman Way, Worthing,
West Sussex, United Kingdom, BN99 3HH. No other group financial statements include the results of the Company. The consolidated
financial statements of Baltic Classifieds Group are available to the public and may be obtained from www.balticclassifieds.com.
Subsidiary BCG Holdco Limited (registered number 13415193) is exempt from the Companies Act 2006 requirements relating to the audit
of its individual accounts by virtue of Section 479A of the Act as Baltic Classifieds Group PLC has guaranteed the subsidiary company
under Section 479C of the Act for the year ended 30 April 2024. This information is disclosed within note 26 to the consolidated financial
statements.
Notes to the Company Financial Statements
continued
Glossary
2022
– means the financial year ended 30 April
2022.
2023
– means the financial year ended 30 April
2023.
2024
– means the financial year ended 30 April
2024.
AGM
– means Annual General Meeting.
Apax
– means funds advised by Apax Partners
ARPU
– means average revenue per user.
Admission
– means the admission of the
ordinary shares of the Company to the premium
listing segment of the Official List and to
trading on the London Stock Exchange’s main
market for listed securities which occurred on
5 July 2021.
Advertisers
– means users of the websites,
listing C2C or B2C advertisements.
B2C listers
– means listers that have a
subscription-based contract with the Group for
online classifieds services and products.
C2C listers
– means listers that transact with
the Group through one-off transactions for
online classifieds services and products and
do not have a subscription-based contract with
the Group for online classifieds services and
Management Incentive Programme (MIP)
–
means an equity incentive plan designed to
reward and incentivise eligible employees.
Major Shareholder
– means ANTLER EquityCo
S.à r.l., an entity controlled by funds advised by
Apax Partners.
Marketplace
– means a place where products
and/or services are bought and sold.
OECD
–
means Organisation for Economic Co-
operation and Development.
Performance Share Plan
– means the long-
term incentive arrangement for the Executive
Directors and other eligible employees.
Portals
– means online classifieds websites.
Prospectus
– means the Company’s prospectus
dated June 2021 and prepared in connection
with the Company’s Admission.
Relationship Agreement
– means an agreement
governing the relationship between the
Company and the Major Shareholder.
Senior Management
– means the Executive
Directors and all portal managers.
Verticals
– means specialised portals, listing
products and services of a specific market,
such as automotive, real estate and jobs and
services.
products.
CEO
– means Chief Executive Officer.
CFO
– means Chief Financial Officer.
Code
– means the UK Corporate Governance
Code published by the FRC in 2018.
COO
– means Chief Operating Officer.
Deloitte
– means Deloitte LLP or Deloitte
Lietuva, UAB both being members of the
Deloitte organisation, a global network of
independent firms.
Executive Directors
– means Justinas Šimkus,
Lina Mačienė and Simonas Orkinas.
GDP
– means gross domestic product.
Generalist portals
- means portals with no
specialisation, listing a wide range of products
and services to consumers.
KPI
– means Key performance indicator.
KPMG
– means KPMG LLP
, a UK limited liability
partnership and a member firm of the KPMG
global organisation of independent member
firms.
Listing
– means an advertisement posted on
a portal.
Shareholder Information
Share capital
The Company’s authorised and issued Ordinary Share capital as at 30 April 2024 comprised a single class of Ordinary Shares. As at 30
April 2024 there were 488,944,427 Ordinary Shares of £0.01 each in issue (net of shares pending cancellation).
As at 27 June 2024, being the last practicable date prior to publication of this report, the Company’s issued share capital (net of shares
pending cancellation) comprised 488,180,628 fully paid Ordinary Shares of £0.01 each.
Details of the Ordinary Share capital and shares issued during the year can be found in note 16 to the consolidated financial statements.
AGM
The AGM will be held at G.D. Kuverto g. 15, Neringa, LT-93123, Lithuania on 27 September 2024 at 11.00 am local time. Further details
can be found in the Notice of Meeting sent to Shareholders, which is also available at www.balticclassifieds.com.
Shareholder queries
Please contact our Registrar, Equiniti Limited, directly for all enquiries about your shareholding:
Online:
https://help.shareview.co.uk
By post:
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA
By telephone:
0371 384 2030
International callers:
+44 (0)371 384 2030
Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Lines are open 8.30 am to 5.30 pm, Monday to Friday excluding public holidays in England and Wales.
Electronic Shareholder communication
We encourage our Shareholders to opt for electronic communications as opposed to hardcopy documents by post. This has a number
of advantages for the Company and its Shareholders. Increased use of electronic communications will deliver savings to the Company
in terms of administration, printing and postage costs, as well as increasing the speed of communication and provision of information
in a convenient form. Less paper also reduces our impact on the environment.
If you would like to receive notifications by email, you can register your email address by the Share Portal https://help.shareview.co.uk
or by writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. Please note that if you hold your shares
corporately or in a CREST account, you are not able to use the Share Portal to inform us of your preferred method of communication
and should instead write to Equiniti Limited.
ADDITIONAL INFORMATION
Baltic Classifieds Group PLC Annual Report and Accounts 2024
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114
115
Warning about share fraud
Shareholders should be aware that they may be targeted by certain organisations offering unsolicited investment advice or the
opportunity to buy or sell worthless or non-existent shares. Should you receive any unsolicited calls or documents to this effect, you
are advised not to give out any personal details or to hand over any money without ensuring that the organisation is authorised by the
United Kingdom Financial Conduct Authority (“FCA”) and doing further research.
If you are unsure or think you may have been targeted you should report the organisation to the FCA. For further information, please visit
the FCA’s website at www.fca.org.uk/scamsmart/share-bond-boiler-room-scams, email [email protected] or call the FCA
consumer helpline on 0800 111 6768 if calling from the United Kingdom or +44 20 7066 1000 if calling from outside the United Kingdom.
Share price information
The Company’s Ordinary Shares are listed on the London Stock Exchange. The price of the Company’s shares is available on the
Corporate Website at www.balticclassifieds.com.
Financial calendar
1
3 July 2024
Dividend announcement date
13 September 2024
Dividend record date
27 September 2024
Annual General Meeting
18 October 2024
Dividend payment date
December 2024
Half-year results announcement
Company information
Registered office:
Highdown House, Yeoman Way, Worthing, West Sussex, United Kingdom, BN99 3HH
Company number:
13357598
Company Secretary:
Eglė Sadauskienė
Independent Auditor:
KPMG LLP
Forward-looking statements
Certain statements made in this Annual Report are forward-looking statements. Such statements are based on current expectations,
forecasts and assumptions and are subject to a number of risks and uncertainties that could cause actual events or results to differ
materially from any expected future events or results expressed or implied in these forward-looking statements. They appear in a
number of places throughout this Annual Report and include Statements regarding the intentions, beliefs or current expectations of the
Directors concerning, amongst other things, the Group’s results of operations, financial condition, liquidity, prospects, growth, objectives,
strategies and the business. Nothing in this Annual Report should be construed as a profit forecast. All forward-looking statements in
this Annual Report are made by the Directors in good faith based on the information and knowledge available to them as at the time
of their approval of this Annual Report. Persons receiving this report should not place undue reliance on forward-looking statements.
Unless otherwise required by applicable law, regulation or accounting standard, the Group does not undertake any obligation to update or
revise publicly any forward-looking statements, whether as a result of new information, future events, future developments or otherwise.
All Intellectual Property Rights in the content and materials in this Annual Report vests in and are owned absolutely by Baltic Classifieds
Group PLC unless otherwise indicated, including in respect of or in connection with but not limited to all trademarks and the Report’s
design, text, graphics, its selection and arrangement.
1
Dates are provisional and may be subject to change.
Shareholder Information
continued
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