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BCA Marketplace plc Preliminary results 2016 1

28 June 2016

BCA Marketplace plc

(‘the Group’ and formerly Haversham Holdings plc)

Preliminary Results for the 15 months ended 3 April 2016

BCA Marketplace plc (‘the Group’ and formerly Haversham Holdings plc) which provides customer‐centric solutions along the automotive value chain, fuelling the largest used‐vehicle remarketing exchange in the UK and Europe, today announces its maiden results for the 15 months ended 3 April 2016, reflecting the 12 month trading period following the acquisition of the BCA Group.

FINANCIAL HIGHLIGHTS

Revenue of £1,153.1m

Adjusted EBITDA1 of £98.5m

Operating profit of £16.3m stated after acquisition costs of £27.4m, depreciation and amortisation of £17.0m, amortisation of acquired intangibles of £34.4m and other non‐recurring costs of £3.4m

Net debt2 of £170.7m

Statutory earnings per share of 1.2p and adjusted earnings per share of 7.1p

First year dividend of 6.0p per share (including a proposed 4.0p final dividend to be paid on 30 September 2016)

OPERATIONAL HIGHLIGHTS

Completed equity raise of £1.0bn

Acquisition of BCA Group, SMA, Stobart Automotive and Ambrosetti

783,000 vehicles sold in UK Vehicle Remarketing (excluding SMA), up 7.9%

333,000 vehicles sold in International Vehicle Remarketing, up 6.4%

172,000 We Buy Any Car vehicles sold, up 15.4%

Over 11m unique visitors to webuyanycar.com

1,002 live BCA Partner Finance customers

BCA Dealer Pro valuation tool rolled out to over 1,000 dealers with 463,000 valuations

893,000 MarketPrice valuations across Europe

c.1.5m (per annum) vehicles transported via current fleet of 540 vehicle transporters

Full service outsource remarketing contracts launched

Commenting on the results, Executive Chairman, Avril Palmer‐Baunack, said “We are pleased to announce this strong set of maiden results, exceeding market expectations and delivering an attractive dividend. Our physical infrastructure, market‐leading IT systems, valuation tools, data and most especially our customers and experienced and committed employees are at the heart of our business and have supported this strong performance in our first full year as a listed group.

“The BCA Group is the UK and Europe’s largest used‐vehicle remarketing exchange, with our continuing development of the Exchange, remarketing products, enhanced full service offerings and market‐leading true transactional data, we continue to be the partner of choice in the automotive sector.

“The new financial year has begun well and the Board remains confident of the Group’s performance. The team will continue to focus on our recently launched T4G programme (Together for Growth) delivering exceptional service and innovation to our customers, a positive working environment for our employees and a financial return for our shareholders.”

1 Adjusted EBITDA is considered by management to be the most appropriate indicator for assessing operational performance of the business and represents the continuing earnings before interest, tax, depreciation and amortisation, acquisition costs and other significant or non‐recurring costs. Adjusted EBITDA is reconciled to operating profit in the Our Performance section 2 The Group definition of net debt excludes the BCA Partner Finance funding and finance leases – see Cash flow and net debt section for further details


About BCA Marketplace plc

From the dock to defleet and beyond, BCA touches over 3.5m vehicles a year, working with OEMs, fleet operators and dealers to provide the backbone of the UK's automotive supply chain.

From technical and logistics services for new vehicles, refurbishment, storage and logistics for the growing used sector and the core remarketing and auction operation, BCA offers the economies of scale and diversity of services to meet the needs of an impressive portfolio of customers.

As the automotive industry faces a period of unprecedented change, BCA is uniquely placed to deliver a range of linked services through the combined infrastructure of regional defleet facilities, vehicle logistics and preparation centres and physical, hybrid and digital remarketing channels.

BCA is investing and innovating today to address the big issues facing the automotive industry tomorrow.

www.bcamarketplaceplc.com

Enquiries:

Square1 Consulting (Financial PR) David Bick

+44 (0)20 7929 5599

Bell Pottinger (Financial PR) David Rydell

+44 (0)20 3772 2500

Cenkos Securities plc (Financial adviser and joint broker)Ian Soanes, Liz Bowman

+44 (0)20 7397 8900

Zeus Capital Limited (joint broker) John Goold, Nick Cowles

+44 (0)20 7533 7727


EXECUTIVE CHAIRMAN’S STATEMENT

I am pleased to announce a strong first set of full year results for the Group. BCA Marketplace plc was formed to build a cohesive, broad‐based services business in the automotive sector. The acquired BCA Group, the UK and Europe’s leading vehicle remarketing business, provides the strong platform at the core of our business. It is the market leader in the UK and all of the key markets in which it operates and also owns We Buy Any Car, the UK’s largest vehicle buying service.

Our physical auction site infrastructure, market‐leading IT systems, valuation tools and data are at the heart of our business, providing an efficient exchange for the automotive market, complemented by our logistical ability to store, remarket and transport large volumes of vehicles effectively. Combined with the physical and digital transactional liquidity offered to vendors and buyers, it places the Group at the centre of the automotive value chain.

In June 2015, we increased the scale of our UK operation through the acquisition of SMA Vehicle Remarketing (‘SMA’) and, following the successful conclusion of the CMA inquiry, added a further four auction centres to our existing 19 centres. These new centres are currently being integrated into the UK Vehicle Remarketing business and together with development opportunities on a number of the existing sites will provide us with additional capacity to accommodate the increasing number of vehicles expected to flow into our business over the coming years.

We achieved year on year volume growth of 7.9% in the UK (excluding SMA) and 6.4% in Europe, where we saw development in all of our territories which contributed to the Group’s success. Our strategy in continental Europe, where penetration rates remain well below those in more established markets such as the UK and USA, is to continue to raise the awareness of both physical and digital auction as a remarketing solution and to provide a more consistent offering across our businesses.

The Board is committed to enhancing our service offering by developing remarketing solutions for the major vehicle fleets, dealers, car manufacturers and finance companies. Since the BCA Group acquisition we have cemented relationships with our major customers and gained volume from new and existing vendors, including long‐term full outsource defleet and remarketing contracts, and we have attracted new buyers to the auctions. We continue to broaden our service offering, enabling the Group to offer full remarketing and outsource solutions to our customers.

We have been successful in winning a five year contract with one of the top three leasing businesses in the UK to provide a fully outsourced remarketing and logistics services operation and a three year contract with an OEM for a package of services including new car preparation, logistics, used car defleet and remarketing. Our BCA Dealer Pro tool has had immense success within the dealer and OEM customer base in the UK and Europe and is establishing itself as the valuation tool of choice in the marketplace. Our BCA Partner Finance business in the UK is demonstrating strong growth and will, we expect, be a key profit generator in the future.

We Buy Any Car continues to show strong growth, with volumes increasing by 15.4% in the year driving a varied product base into the auction operations. Whilst We Buy Any Car is the market leading brand in its area, this still represents a small proportion of the overall number of used car transactions and there are considerable opportunities ahead as this method of vehicle disposal increases market share.

In August, the Group acquired a substantial UK logistics business, now renamed as BCA Automotive. This brought into the Group a new revenue stream from the delivery of new cars into the UK retail market, enhancing our relationships with the automotive OEMs, whilst also addressing some cost and operational pressure in the BCA logistics business, driven by a lack of capacity in the car transporter market. We are in the process of integrating BCA Automotive with our logistics operations into and out of auction centres, including We Buy Any Car volumes and single vehicle movements, and expect to see operational benefits in future years.

In addition, the acquisition of Ambrosetti in February 2016, a company specialising in vehicle preparation, refurbishment and defleet, brings another new business area into the Group to complement the existing suite of automotive services. We have created a structure to combine these into a new Services division for 2016/17, which will continue to enhance our strategic aim of becoming the full service provider of choice for the automotive industry.

Trading for the year, since the acquisition of the BCA Group, has been strong with good performances in all of our operations and we are pleased to have achieved all the strategic goals for the year which we set out as part of the acquisition. Our aim is to deliver strong earnings growth coupled with a high dividend pay‐out ratio and, following an interim dividend of 2.0p per share, we propose today, subject to shareholder approval at our AGM, a 4.0p final dividend to be paid on 30 September 2016. Since the year end, the business continues to trade well and in line with Board expectations.

Much has been achieved in the last year in forming the BCA Marketplace family and I would like to thank all of our employees for their continued dedication and loyalty to the businesses that have come together to form this Group. I look forward to working together with our team through our Together for Growth programme to continue to deliver the strong business growth which I anticipate continuing in all our markets.

Avril Palmer‐Baunack Executive Chairman


OUR PERFORMANCE

BCA Marketplace plc was formed with the objective of creating value through an acquisition‐led growth strategy with investment in businesses in the automotive, support services, leasing, engineering or manufacturing sectors in both the UK and Europe. This was initiated with the acquisition of the BCA Group of companies and the simultaneous listing of the Company on the Official List of the London Stock Exchange in April 2015.

We own and operate the UK and Europe’s largest used‐vehicle marketplace both in terms of the number of vehicles sold and revenue in the exchanges, as well as the UK’s market leading provider of vehicle buying services, We Buy Any Car. Together, this allows the Group to provide an efficient and effective mechanism to facilitate the change in ownership of used vehicles that matches the complex requirements of both vendors and buyers of used vehicles who utilise the Exchange.

The Exchange is at the hub of the Group’s business model, managing the transaction of used vehicles between vendors and buyers. This is complemented by a broad range of value‐added services that fuel the Exchange. Scale, liquidity, value, efficiency and transparency are hallmarks of the operation.

BCA sells used vehicles of all ages and types, principally cars and LCVs, both online and at physical auctions with most vehicles being auctioned simultaneously online and at one of the Group’s physical auction centres. BCA earns fees from the vendor and buyer of the vehicles.

Supply is generated from a wide range of customers who use auction as their primary disposal channel and who appreciate the transparency, efficiency and liquidity provided by the Exchange. Another key source of supply is from the Group’s Vehicle Buying division. Demand is generated by a large, diverse buyer base that ranges from large car supermarkets to vehicle traders who recognise the value, scale, choice and footprint of the Exchange network.

The Group provides a broad portfolio of services both upstream of the Exchange with automotive logistics and technical services and also pre‐ and post‐sale at the Exchange. These value‐added services provide additional income streams and support the onward flow of vehicles to the Exchange.

The Group’s systems capture vehicle data and information including details of the Exchange transaction and at other key stages of the automotive value chain. Analytics tools and models generate insight that is used to optimise the performance of the Vehicle Remarketing and Vehicle Buying divisions as well as providing insight services to customers.

The acquisition of the BCA Group was the first major step in the delivery of the Group’s strategy to acquire and manage companies in the automotive sector, with a view to delivering value from operational efficiencies across the value chain. The combination of organic volume growth, increasing penetration of new and existing services, and improved efficiency, together with the subsequent acquisitions of SMA, BCA Automotive and Ambrosetti, have delivered the strong financial results that the Board envisaged at the point of the BCA Group acquisition.


In order to present its financial position in the most meaningful way, BCA Marketplace plc changed its year end from 31 December to 31 March and will therefore prepare its accounts to a Sunday within seven days of 31 March. Whilst we are reporting on a 15 month period, it represents 12 months of trading since the BCA Group acquisition. This has resulted in Group statutory revenue of £1,153.1m (8 months ended 31 December 2014: £nil) in the period and adjusted EBITDA1 of £98.5m which is broken down by division as follows:

Revenue Adjusted EBITDA1

£m £m

UK Vehicle Remarketing 267.2 69.4

International Vehicle Remarketing 109.5 18.9

Vehicle Buying – We Buy Any Car 688.6 16.9

Vehicle Buying – International 9.8 (0.8)

Other 78.0 3.2

Central costs ‐ (9.1)

Total 1,153.1 98.5

In order to provide a context for the Group results, the following divisional analysis includes prior period comparatives which have been prepared on a proforma basis and relate to the equivalent prior 12 month period for the acquired BCA Group. Other acquired businesses are dealt with separately in ‘Other’ below.

UK Vehicle Remarketing

The Group’s UK Vehicle Remarketing division trades under the BCA brand at 19 auction centres in 17 locations. BCA sells vehicles at our Exchanges on behalf of a broad portfolio of vendors including manufacturers (OEMs), leasing companies, dealers and vehicle buying companies. Buyers include car supermarkets, franchised and independent dealers, professional vehicle traders and consumers.

Exchanges comprise physical and digital auctions and outsourced remarketing services. These are complemented by a portfolio of pre‐ and post‐sale value‐added services including our buyer funding service, BCA Partner Finance.

The UK Vehicle Remarketing division delivered a strong performance, driven by growth in the volumes of vehicles traded through its auction operations. As supply has increased, buyer demand has been strong and conversion rates have also remained higher than the comparable period, resulting in improved operational efficiency.

Highlights

Year ended

3 April 2016

Year ended

4 April 20152Change

Vehicles sold (‘000) 783 726 +7.9%

Revenue per vehicle (£) 341 324 +5.2%

Revenue (£m) 267.2 235.2 +13.6%

Adjusted EBITDA1 (£m) 69.4 56.2 +23.5%

Adjusted EBITDA per vehicle (£) 89 77 +15.6%

Adjusted EBITDA margin (%) 26.0 23.9

Volume growth of 7.9% reflects additional volumes from both existing and new customers across all vendor types, including the award of a new OEM contract. We have continued to grow market share during this period.

1 Adjusted EBITDA is considered by management to be the most appropriate indicator for assessing operational performance of the business and represents the continuing earnings before interest, tax, depreciation and amortisation, acquisition costs and other significant or non‐recurring costs 2 Prior period comparatives relate to the acquired BCA Group and have been prepared on a proforma basis for the equivalent prior year period to provide a context for the Group results. The figures are unaudited


The mix of vehicles coming from our vendors, coupled with the diverse range of vehicles coming to auction through our Vehicle Buying division, presents an attractive product range to our buyer base. In addition, the investment made in vehicle appraisal, imagery and the BCA Assured service is increasing the confidence buyers have in purchasing at BCA. The number of active buyers participating in each auction, both in the hall and via BCA’s Live Online platform, continues to increase, driving better price performance and higher conversion rates.

BCA’s commitment to continually improving vendor and buyer experiences, optimising stock availability and online sales channels, have all contributed to the increased volume sold. The increased penetration of online sales and value‐added services, such as BCA Assured and BCA Partner Finance, has delivered average revenue per vehicle growth of 5.2%, resulting in strong overall revenue growth of 13.6%.

BCA Partner Finance is strategically important for the UK Vehicle Remarketing division as it adds liquidity and generates additional buyer demand in the marketplace. The number of vehicles financed has shown significant growth over this period and penetration has now increased to 7.0% of all BCA vehicles sold in March 2016, resulting in a loan book of £64.7m (up from 3.6% and £28.1m respectively as at the point of acquisition on 2 April 2015). There is significant scope for further growth as the product is made available to a wider buyer base in a structured rollout.

Adjusted EBITDA margin in the UK increased as a result of improved operational leverage and a focus on operating costs in the auction business, which was partly offset by cost pressures in the logistics business. This translated to period on period adjusted EBITDA growth of 23.5%.

Our UK logistics business was impacted during the period by a lack of available bought‐in capacity to sustain customer service levels given the increase in vehicle movements. The acquisition of the BCA Automotive business and the logistics capability of SMA has stabilised this business and has given the Group the opportunity to redesign the logistics network to optimise the efficiency of vehicle movements.

In order to provide capacity for the targeted growth in auction volumes and to enhance the strategic footprint to support buyer demand, the investment in, and development of, new and existing auction centres is progressing. Increased capacity at our key auction centres in Manchester Belle Vue, Bedford and Blackbushe, as well as the on‐going development of our new brownfield auction centre at Birmingham Perry Barr, are all expected to become operational in 2016/17.

International Vehicle Remarketing

The Group’s International Vehicle Remarketing division operates primarily across nine countries throughout Europe at 28 auction centres with operations in Denmark, France, Germany, Italy, the Netherlands, Portugal, Spain, Switzerland and Sweden.

Distinct from the UK market, European customers have a higher propensity to trade at online auctions both in a single country and between operating markets and to buy vehicles to export to countries including Austria, Belgium, Poland, Romania and Serbia.

The International Vehicle Remarketing division has performed well in the period recording 333,000 sold vehicles, a growth of 6.4% compared to the prior year. Throughout the division, we are committed and focused on initiatives that raise brand and auction awareness, enabling us to continue to build stronger relationships with both vendors and buyers.

Despite the adverse impact of exchange rate movements in the period (€1.35:£1 in the current period compared to €1.26:£1 in the prior period), the division delivered a 5.0% increase in adjusted EBITDA. At constant currency the division has delivered EBITDA growth of 12.8% over the period and revenue and EBITDA per unit would have been £353 and £61 respectively, representing increases of 7.3% and 5.2% compared to the prior year.


Highlights1

Year ended

3 April 2016

Year ended

4 April 20152Change

Vehicles sold (‘000) 333 313 +6.4%

Revenue per vehicle (£) 329 329 ‐

Revenue (£m) 109.5 103.1 +6.2%


Adjusted EBITDA per vehicle (£) 57 58 ‐1.7%


Since the acquisition of the BCA Group, the Group has appointed a Chief Operating Officer to lead the entire International Vehicle Remarketing division to improve operational alignment, sharing best practice and building a common technology platform across our European operations.

A focus on our diverse vendor base has resulted in a pleasing level of growth in auction volumes across all markets in Europe, with the majority of volume growth in the current period derived from the dealer segment. This reflects the initial results of initiatives to raise awareness of auction, as both a source of vehicles and a disposal route for surplus stock, through activities such as customer workshops (dealer days). The continued rollout of software solutions, such as BCA Dealer Pro and BCA MarketPrice (a part‐exchange valuation tool), continue to help our vendors improve their stock turn and profitability whilst driving continued growth in volumes.

As the supply of vehicles increases, we continue to develop initiatives to support buyer demand including Chrono45 (an extended payment terms and transport package) and CarTrade2B, a vehicle buying service. Throughout Europe, most transactions are completed partially or entirely digitally and we have added smaller flexible local sites closer to our customers to support the storage, inspection and delivery of electronically transacted units.

As the division grows we will deploy technology and products already used in the UK Vehicle Remarketing business on a market‐by‐market basis as we strive towards standardised offerings across the division, thereby improving efficiency.

Subsequent to the period end the Group disposed of its interest in its Brazilian joint venture.

Vehicle Buying

The Vehicle Buying division incorporates We Buy Any Car in the UK and CarTrade2B, our new vehicle buying initiative in Europe. We Buy Any Car’s focus remains on growing the third disposal channel in the UK, providing a significant supply of vehicles to the UK Vehicle Remarketing division. Shortly after the BCA Group acquisition, management took the strategic decision to cease operating the loss‐making We Buy Any Car model in Europe.

Highlights ‐ UK

Year ended

3 April 2016

Year ended

4 April 20152Change

Vehicles sold (‘000) 172 149 +15.4%

Revenue per vehicle (£) 4,003 3,882 +3.1%

Revenue (£m) 688.6 578.4 +19.1%


Adjusted EBITDA per vehicle (£) 98 89 +10.1%


1 Adjusted EBITDA is considered by management to be the most appropriate indicator for assessing operational performance of the business and represents the continuing earnings before interest, tax, depreciation and amortisation, acquisition costs and other significant or non‐recurring costs 2 Prior period comparatives relate to the acquired BCA Group and have been prepared on a proforma basis for the equivalent prior year period to provide a context for the Group results. The figures are unaudited


Highlights ‐ International1

Year ended

3 April 2016

Year ended

4 April 20152

Change

Vehicles sold (‘000) 3 2 +50.0%

Revenue (£m) 9.8 7.8 +25.6%

Adjusted EBITDA1 (£m) (0.8) (0.8) ‐

Established as a brand in 2006 and having invented the third disposal channel, We Buy Any Car continues to grow in the UK, providing the consumer with an alternative to private sale or part‐exchange. The benefits of selling in an easy, safe and quick environment, together with having funds available to purchase a replacement car, continues to gain traction with the UK motorist. We have continued to invest in our brand through a refreshed advertising campaign in early 2016 which focuses on reinforcing these benefits.

We Buy Any Car has delivered strong volume growth and, through sustained and targeted advertising, provides a controlled supply of vehicles into the UK Vehicle Remarketing division. The integration of We Buy Any Car with the UK Vehicle Remarketing division means that, on average, it takes 10 days from paying the consumer for their vehicle to selling the vehicle at auction.

We Buy Any Car has seen growth in both volume and revenue per unit as the business model is accepted by more consumers who see the benefit of this means of disposal and have higher value vehicles for We Buy Any Car to acquire. Operating from a portfolio of over 200 branches nationwide, We Buy Any Car is in close proximity to consumers, providing both convenience and brand awareness when they are considering the disposal of their vehicle. The combined benefit of increased volume and gross profit over a deployed fixed cost base has driven an EBITDA improvement from £13.2m to £16.9m.

Included in the International adjusted EBITDA is a loss of £0.8m relating to the now closed European We Buy Any Car operation. A new car buying initiative, CarTrade2B, was successfully trialled in Germany and we have now initiated similar projects in the Netherlands, Spain and Sweden. These businesses are focused on buying batches of vehicles direct from corporate entities and remarketing them through the International Vehicle Remarketing division. Management will continue to deploy a similar operating model tactically in certain specific international markets where they bring benefits to auction awareness, volume and efficiency.

Other

This includes the other acquired businesses, SMA, BCA Automotive and Ambrosetti, together with non‐core activities and Group costs.

From acquisition to 3 April 2016

Highlights Revenue Adjusted EBITDA1

£m £m

SMA 28.5 2.3

BCA Automotive 44.3 2.1

Ambrosetti 4.3 (0.6)

Other 0.9 (0.6)

Group costs ‐ (9.1)

Other 78.0 (5.9)

SMA was operated under a ‘hold separate’ order for the majority of the period since its acquisition in June 2015 whilst the Competition and Markets Authority (‘CMA’) inquiry was undertaken. The agreed remedy with the CMA was for the Group to dispose of the SMA Newcastle auction centre which was successfully achieved in January 2016. The four remaining SMA auction centres have been incorporated into the UK Vehicle Remarketing division from the beginning of

1 Adjusted EBITDA is considered by management to be the most appropriate indicator for assessing operational performance of the business and represents the continuing earnings before interest, tax, depreciation and amortisation, acquisition costs and other significant or non‐recurring items 2 Prior period comparatives relate to the acquired BCA Group and have been prepared on a proforma basis for the equivalent prior year period to provide a context for the Group results. The figures are unaudited


the new financial year. Management is pleased with the performance of the SMA business during the period of uncertainty and believes the full integration into the UK Vehicle Remarketing division will bring benefits to both vendors and buyers.

BCA Automotive was acquired in August 2015 and has, in the seven months since its acquisition, completed more than 600,000 vehicle deliveries throughout the UK and 250,000 fixed route deliveries from production facilities to their export point. On an annualised basis this equates to approximately 1.5m vehicle movements and represents a significant share of vehicle movements in the UK.

BCA Automotive has also assumed responsibility for the operation of the fleet of SMA transporters and now operates a fleet of over 540 transporters. In addition, an increasing number of vehicle movements are being carried out on behalf of the UK Vehicle Remarketing and Vehicle Buying divisions. The divisions are working closely together to integrate the transport network deliveries with the branch requirements and single‐vehicle moves, which will lead to greater efficiency in the overall logistics operations.

Ambrosetti, a company specialising in vehicle preparation, refurbishment and defleet services, was acquired in February 2016 and will be integrated into the Group’s operations during 2016/17.

With the acquisition of the automotive, logistics and technical services businesses into the Group during the financial period, management have completed another step in the execution of the strategy to become a broad‐based automotive services company.

Financial performance

The divisional operating reviews are focused on adjusted EBITDA as this is the measure used by management to monitor business performance. The following table reconciles adjusted EBITDA to statutory operating profit.

15 month period

ended 3 April 2016

8 months ended 31

December 2014

£m £m

UK Vehicle Remarketing 69.4 ‐

International Vehicle Remarketing 18.9 ‐

Vehicle Buying – We Buy Any Car 16.9 ‐

Vehicle Buying – International (0.8) ‐

Other (5.9) (0.3)

Total adjusted EBITDA 98.5 (0.3)

Less: Depreciation and amortisation (17.0) ‐

Significant or non‐recurring costs (65.2) ‐

Operating profit/(loss) 16.3 (0.3)

Significant or non‐recurring costs of £65.2m consist of acquisition costs of £27.4m relating to the four completed acquisitions and other aborted acquisitions, amortisation of the associated acquired intangible assets of £34.4m and other significant or non‐recurring costs of £3.4m. Details of the acquisition accounting are included in note 4.

Other significant or non‐recurring costs of £3.4m relate to the reorganisation of the Group to form clearer divisional structures, including flattening the leadership structure and closure costs of loss‐making businesses, and the integration of all of the acquired businesses.

Cash flow and net debt

During the period, the Group completed a capital reduction which facilitates the payment of dividends and also completed a successful syndication of the Group’s financing facilities. As at the period end, the Group facilities comprise a term loan of £275m which, together with a £100m revolving facility funded at competitive interest rates, provides additional headroom for future projects.


During the period the Group generated strong cash flows from operations of £89.9m and ended the period with net debt of £170.7m. The Group definition of net debt excludes the debts relating to BCA Partner Finance and finance leases, as these are funded under separate asset‐backed lending agreements.

As at the balance sheet date, the Group has additional asset‐backed facilities in relation to BCA Partner Finance totalling £60m of which £40.2m was drawn at the period end and finance leases totalling £26.9m

The Group continues to operate comfortably within its banking covenant.

Earnings per share and dividends

Adjusted basic and diluted earnings per share were 7.1p and 7.0p respectively. Earnings per share has been adjusted by using adjusted earnings and calculating the weighted average number of shares in issue for the period from the date of the Placing and acquisition of the BCA Group as shown in note 6. Statutory basic and diluted earnings were 1.2p per share.

The Board intends to adopt a progressive dividend policy for the Group to reflect its strong earnings potential and cash flow characteristics, while allowing it to retain sufficient capital to fund on‐going operating requirements and to invest in the Group’s long‐term growth plans. The Board is targeting a pay‐out ratio of 75% of earnings as dividends in the medium term. In addition to the 2.0p per share paid in December 2015, we are pleased to propose a dividend of 4.0p per share, subject to approval at the Annual General Meeting on 8 September 2016, to be paid on 30 September 2016 to shareholders on the Register on 23 September 2016.

Avril Palmer‐Baunack Executive Chairman

Tim LampertChief Financial Officer


OUR STRATEGY

Our business model is unique in its breadth of services across the automotive value chain. This provides a compelling customer service offering and also creates efficiencies through synergies across all the divisions. The key points of differentiation include the scale and capacity of the geographic footprint, which in the UK has sites positioned along the spine of the country and close to motorways and in Europe the ability to operate as a single market; the aggregation of inventory with a balanced portfolio across sectors and vendors, including the mix and diversity of supply from We Buy Any Car; the tenure and strength of customer relationships on both the supply and demand side; the experience and professionalism of the operations team; financial services to provide additional liquidity to the Exchange; the ability to offer fulfilment of services along the automotive value chain; efficiencies created through operational synergies; digital innovation in the provision of standard tools and services across the business and the vehicle transaction database.

The Group’s strategy is to create value through acquisition‐led growth in the automotive sectors in the UK and Europe. Our aim is to drive growth along the automotive value chain, focussing on the core business: increasing volumes, creating value‐added services and driving efficiencies.

This has been executed in the first year of trading with a primary focus on the UK.

Short term

UK Vehicle Remarketing

Continue to win volume through strong customer relationships

Secure volume for long term and grow to full scale

Grow BCA Partner Finance

Seek efficiencies

Expand outsourced remarketing solutions

International Vehicle Remarketing

Grow volume through increasing market awareness

Standardise processes and tools and employ best practice

Build one market

Seek efficiencies

Expand service offering

Vehicle Buying

Continue to grow volume by promoting the third disposal channel

Reinforce the We Buy Any Car brand

Provide vehicle mix and volume to the Exchange

Seed new sites and sale days in Europe

Services

Consolidate to achieve single, efficient operating model

Grow through winning new business, expand customer relationships in Vehicle Remarketing

Expand proposition of value‐added services

Seek efficiencies

Medium Term

In the medium term, we will continue to develop our operations and service offering in both the UK and Europe to reach full scale. This will build upon the strengths of our fulfilment capabilities, physical real estate, vehicle buying and customer relationships.

Long Term

We will continue to develop our strategy along the automotive value chain in the longer term through both organic growth and tactical acquisitions with a focus upon the exploitation of data and other innovations.


CONSOLIDATED INCOME STATEMENT

9

1 The current period is a 15 month period ended 3 April 2016, which represents 12 months of trading since the BCA Group acquisition on 2 April 2015 2 Prior period comparatives relate to BCA Marketplace plc, which during that period was known as Haversham Holdings plc, and its subsidiary H.I.J. Limited, for the 8 month period from incorporation to 31 December 2014

Note

£m £m £m £m

Revenue 3 ‐

Cost of sales ‐

Gross profit ‐

Operating costs (0.3)

Operating profit/(loss) 3 (0.3)

Adjusted EBITDA (0.3)

Less: ‐ Depreciation and amortisation 3 (17.0) ‐

‐ Amortisation of acquired intangibles 3 (34.4) ‐

‐ Acquisition costs 3 (27.4) ‐

‐ Business closure costs 3 (1.1) ‐

‐ Other significant or non‐recurring items 3 (2.3) ‐

‐

Operating profit/(loss) 16.3 (0.3)

Finance income 0.3 ‐

Finance costs (12.7) ‐

Profit/(loss) before income tax 3.9 (0.3)

Income tax credit 7 3.8 ‐

Profit/(loss) for the period 7.7 (0.3)

Attributable to:

Equity owners of the parent 7.7 (0.3)

Non‐controll ing interests ‐ ‐

7.7 (0.3)

(expressed in pence per share)

Basic earnings/(loss) per share 6 1.2 (5.5)

Diluted earnings/(loss) per share 6 1.2 (5.5)

(844.5)

For the 15 months

ended

3 Apri l 2016¹

For the 8 months

ended

31 December 20142

1,153.1

(82.2)

308.6

(292.3)

16.3

98.5

Earnings/(loss) per share from continuing operations attributable to the

equity holders of the parent during the period


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

£m £m


Other comprehensive income:

Items that will not be reclassified to the income statement

(0.3) ‐

Items that may be subsequently reclassified to the income statement

Foreign exchange translation 29.0 ‐

Total other comprehensive income, net of tax 28.7 ‐

Total comprehensive profit/(loss) for the period 36.4 (0.3)

Attributable to:

Equity owners of the parent 36.4 (0.3)

Non‐controlling interests ‐ ‐

36.4 (0.3)

For the 15 months

ended

3 April 2016

For the 8 months

ended

31 December 2014

Remeasurements on defined benefit schemes, including deferred tax


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

£m £m £m £m £m £m £m £m

Balance on incorporation at 30

April 2014 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total comprehensive income for

the period

Loss for the period ‐ ‐ ‐ ‐ (0.3) (0.3) ‐ (0.3)

Total comprehensive loss for the

period‐ ‐ ‐ ‐ (0.3) (0.3) ‐ (0.3)

Contributions and distributions

Net proceeds from shares issued 0.3 28.7 ‐ ‐ ‐ 29.0 ‐ 29.0

Total transactions with owners 0.3 28.7 ‐ ‐ ‐ 29.0 ‐ 29.0

Balance at 31 December 2014 0.3 28.7 ‐ ‐ (0.3) 28.7 ‐ 28.7


the period

Profit for the period ‐ ‐ ‐ ‐ 7.7 7.7 ‐ 7.7

Other comprehensive income ‐ ‐ ‐ 29.0 (0.3) 28.7 ‐ 28.7


the period‐ ‐ ‐ 29.0 7.4 36.4 ‐ 36.4

Contributions and distributions

Net proceeds from shares issued 7.5 986.6 103.6 ‐ ‐ 1,097.7 ‐ 1,097.7

Capital reduction ‐ (1,015.3) ‐ ‐ 1,015.3 ‐ ‐ ‐

Equity‐settled share based payments ‐ ‐ ‐ ‐ 0.6 0.6 ‐ 0.6

Dividends paid ‐ ‐ ‐ ‐ (15.6) (15.6) ‐ (15.6)

Changes in ownership interests

Acquisition of subsidiary with

non‐controll ing interest‐ ‐ ‐ ‐ ‐ ‐ (0.2) (0.2)

Total transactions with owners 7.5 (28.7) 103.6 ‐ 1,000.3 1,082.7 (0.2) 1,082.5

Balance at 3 April 2016 7.8 ‐ 103.6 29.0 1,007.4 1,147.8 (0.2) 1,147.6

Non‐

control l ing

interests

Tota l

equity

Attributable to equity owners of the parent

Share

capita l

Share

premium

Merger

reserve

Foreign

exchange

reserve

(Accumulated

defici t) /

reta ined

profi t Tota l


CONSOLIDATED BALANCE SHEET

Note

£m £m

Non‐current assets

Intangible assets 1,449.5 ‐

Property, plant and equipment 115.5 ‐

Deferred tax asset 15.9 ‐

Total non‐current assets 1,580.9 ‐

Current assets

Inventories 19.3 ‐

Trade and other receivables 210.0 ‐

Cash and cash equivalents 102.4 28.8

Current tax 0.3 ‐

Total current assets 332.0 28.8

Total assets 1,912.9 28.8

Non‐current liabilities

Bank borrowings 8 (273.1) ‐

Trade and other payables (88.7) ‐

Pension deficit (7.6) ‐

Provisions (18.7) ‐

Deferred tax liabilities (110.8) ‐

Total non‐current liabilities (498.9) ‐

Current liabilities

Buyer finance borrowings 9 (40.2) ‐

Trade and other payables (225.3) (0.1)

Provisions (0.9) ‐

Total current liabilities (266.4) (0.1)

Total liabilities (765.3) (0.1)

Net assets 1,147.6 28.7

Equity shareholders’ funds

Share capital 7.8 0.3

Share premium ‐ 28.7

Merger reserve 103.6 ‐

Foreign exchange reserve 29.0 ‐

Retained profit/(accumulated deficit) 1,007.4 (0.3)

Equity shareholders’ funds 1,147.8 28.7

Non‐controlling interests (0.2) ‐

Total shareholders’ funds 1,147.6 28.7

As at

3 April 2016

As at

31 December 2014


CONSOLIDATED CASH FLOW STATEMENT

Note

£m £m

Cash generated from operations 5 89.9 (0.1)

Increase in buyer finance loan book (36.6) ‐

Interest paid (6.1) ‐

Interest received 0.3 ‐

Tax paid (3.7) ‐

Net cash inflow/(outflow) from operating activities before

acquisition related cash flows

43.8 (0.1)

Acquisition related cash flows (46.4) ‐

Net cash outflow from operating activities (2.6) (0.1)

Cash flows from investing activities

Purchase of property, plant and equipment (24.6) ‐

Purchase of intangible assets (13.3) ‐

Proceeds from sale of property, plant and equipment 4.9 ‐

Proceeds from sale of asset held for sale 1.5 ‐

Acquisition of subsidiary undertakings, net of cash acquired (690.3) ‐

Net cash outflow from investing activities (721.8) ‐

Cash flows from financing activities

Proceeds from share issue 993.4 28.9

Dividends paid 10 (15.6) ‐

Proceeds from borrowings 275.0 ‐

Repayments of borrowings (468.6) ‐

Financing fees paid 8 (7.7) ‐

Payment of finance lease l iabil ities (1.8) ‐

Increase in buyer finance borrowings 20.5 ‐

Net cash inflow from financing activities 795.2 28.9

Net increase in cash and cash equivalents 70.8 28.8

Foreign exchange on cash held 2.8 ‐

Cash and cash equivalents at period start 28.8 ‐

Cash and cash equivalents at period end 102.4 28.8

For the 15 months

ended

3 Apri l 2016

For the 8 months

ended

31 December

2014


NOTES TO THE FINANCIAL INFORMATION

1. GENERAL INFORMATION

BCA Marketplace plc (the ‘Company’), formerly Haversham Holdings plc, was incorporated in April 2014 with the aim to acquire and manage companies in the UK and European automotive sector. On 2 April 2015, BCA Marketplace plc acquired the BCA Group (’BCA Group’). This was followed by the acquisitions of SMA Vehicle Remarketing Limited (‘SMA’) on 1 June 2015, Stobart Automotive Limited (‘BCA Automotive’) on 25 August 2015 and Ambrosetti (U.K.) Limited (’Ambrosetti’) on 4 February 2016. Acquisitions are discussed further in note 4.

BCA Marketplace plc has changed its year end from 31 December to 31 March and will prepare its financial statements to a Sunday within seven days of 31 March in order to present its financial position in the most meaningful way. Whilst this is therefore a 15 month period ended 3 April 2016, it represents 12 months of trading since the BCA Group acquisition on 2 April 2015. The comparative period is for an 8 month period from incorporation to 31 December 2014 and includes no trading activities.

BCA Marketplace plc is incorporated and domiciled in the UK with the registered number 09019615. The address of the Company’s registered office is 20 Buckingham Street, London, WC2N 6EF.

2. ACCOUNTING POLICIES

(a) Basis of preparation

The financial information set out above does not constitute the Company's statutory accounts for the 15 month period ended 3 April 2016 or the 8 months ended 31 December 2014 but is derived from those accounts. Statutory accounts for the 8 months ended 31 December 2014 have been delivered to the Registrar of Companies, and those for the 15 month period ended 3 April 2016 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The financial information for the 15 month period ended 3 April 2016 has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (‘IFRS’) and IFRS Interpretations Committee (‘IFRS IC’) interpretations as adopted by the European Union (‘Adopted IFRS’) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. However, this announcement does not itself contain sufficient information to comply with IFRSs.

The same accounting policies, presentation and methods of computation have been applied in these financial statements as were applied in the consolidated financial statements of the Group as at and for the period ended 31 December 2014 and the Haversham Holdings plc Prospectus dated 26 March 2015, which contains the BCA Group’s historical financial information.

The financial statements and the notes to the financial statements are presented in millions of pounds Sterling (‘£m’) except where otherwise indicated.

(b) Going concern

At the start of the period the Group had no debt. When the Group acquired the BCA Group it also agreed new finance facilities, as discussed in note 8.

The Group now maintains a mixture of medium‐term debt, committed credit facilities, finance lease arrangements and cash reserves, which together are designed to ensure that the Group has sufficient available funds to finance its operations. The Board reviews forecasts of the Group’s liquidity requirements based on a range of scenarios to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.


(b) Going concern (continued)

After making appropriate enquiries and having considered the business activities and the Group’s principal risks and uncertainties, the Directors are satisfied that the Company and the Group as a whole have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the consolidated financial statements have been prepared on a going concern basis.

3. SEGMENTAL REPORTING

Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used both to assess performance and make strategic decisions. Management has identified that the Board of Directors is the chief operating decision maker in accordance with the requirements of IFRS 8.

The Board of Directors consider the business to be split into three main segments generating revenue: Vehicle Remarketing, comprising the UK and International divisions, and Vehicle Buying. ‘Other’ comprises central head office functions and costs not directly attributable to the segments, as well as recently acquired businesses which have yet to be integrated into existing business segments.

Information on segment assets and liabilities is not regularly reported to the Board of Directors.

Acquisition costs of £27.4m relate to the acquisition of the BCA Group (£20.6m), SMA (£4.7m, including the loss on the sale of the Newcastle site of £2.5m), BCA Automotive (£0.7m), Ambrosetti (£0.4m) and further due diligence costs of transactions not completed (£1.0m), which have been charged to operating costs.

Vehicle

BuyingOther Total

UK Internationa l Tota l

£m £m £m £m £m £m

Revenue

Total revenue 270.2 109.9 380.1 698.4 80.1 1,158.6

Inter‐segment revenue (3.0) (0.4) (3.4) ‐ (2.1) (5.5)

Total revenue from external customers 267.2 109.5 376.7 698.4 78.0 1,153.1

Adjusted EBITDA 69.4 18.9 88.3 16.1 (5.9) 98.5

Depreciation and amortisation (10.0) (2.9) (12.9) (1.2) (2.9) (17.0)

Adjusted operating profit 59.4 16.0 75.4 14.9 (8.8) 81.5

Amortisation of acquired intangibles (34.4)

Acquisition costs (27.4)

Business closure costs (1.1)

Other significant or non‐recurring items (2.3)

Operating profit 16.3

Finance income 0.3

Finance cost (12.7)

Profit before taxation 3.9

Capital expenditure 25.4 3.4 28.8 2.1 20.6 51.5

For the 15 months ended 3 Apri l 2016

Vehicle Remarketing


3. SEGMENTAL REPORTING (continued)

Revenue with external customers in the UK and Ireland represents £1.1bn of the Group’s revenue, with the other £0.1bn being generated within Europe. Revenue by type is shown below:

Comparative information for the 8 months ended 31 December 2014

In the comparative period the Group incurred operating costs of £0.3m.

The segments identified above represent segments that were formed following the acquisition of the BCA Group. As a result there is no comparative information available within BCA Marketplace plc. Proforma information for the BCA Group during the equivalent period in the prior year from April 2014 to March 2015 is available in Our Performance, on pages 4 to 10. This does not include BCA Marketplace plc, SMA, BCA Automotive or Ambrosetti.

£m £m

Sale of goods 699.6 ‐Rendering of services 446.8 ‐Interest 6.7 ‐

Total revenue 1,153.1 ‐

For the 15 months

ended

3 April 2016

For the 8 months

ended

31 December 2014


4. ACQUISITIONS

The following acquisitions have been made by the Group in the period.

BCA Group

On 2 April 2015 the Group acquired 100% of the Ordinary shares of the BCA Group for £815.5m satisfied by £711.2m in cash and £104.3m by the issue of 69,535,522 Ordinary shares. The fair value of the Ordinary shares issued was based on the Placing share price of the Company at 2 April 2015 of £1.50 per share. The company acquired was CD&R Osprey Investment S.à.r.l., the immediate parent of the BCA Group. The BCA Group is the number one vehicle remarketing business in the UK and Europe, as well as owning We Buy Any Car, the market leading vehicle buying business in the UK. This acquisition is part of the Group’s strategy of acquiring and developing substantial businesses in the automotive sector.

Goodwill has arisen on the acquisition due to the unique position that the BCA Group has in the automotive sector. The BCA Group has created a marketplace and a proposition with an assembled workforce, significant barriers to entry and geographical presence generating a value that cannot be defined and measured as an intangible asset. As such the excess over the identified net assets has been recognised as goodwill.

The acquired balance sheet above has changed from what was reported in the Interim report for the nine months ended 4 October 2015. The net movement of £1.5m reflects the finalisation of the fair value acquisition accounting and predominantly relates to the valuation of property, acquired corporation tax debtor and deferred tax liability.

The fair value of acquired receivables was £122.2m. The gross contractual amounts receivable were £123.3m and, at the acquisition date, £1.1m of contractual cash flows were not expected to be received.

Fair value

£m

Intangible assets: ‐ Brand 158.9

‐ Vendor relationships 329.0

‐ Buyer relationships 61.3

‐ Software fair value uplift 22.5

‐ Software net book value 21.0

Property, plant and equipment 54.3

Inventories 14.7

Trade and other receivables 144.8

Cash and cash equivalents 73.9

Trade and other payables (298.0)

Provisions (21.1)

Pension liability (5.0)

Deferred tax liability (97.0)

Borrowings (451.9)

Net assets acquired 7.4

Goodwill 807.9

Consideration 815.5

Non‐controlling interests (0.2)

815.3


4. ACQUISITIONS (continued)

Other acquisitions

The Group made three other acquisitions in the financial period and in each case acquired 100% of the share capital. Fair values of the assets and liabilities (excluding cash and borrowings) have been determined on a provisional basis whilst being formally reviewed and will be finalised within 12 months of each acquisition.

SMA (acquired 1 June 2015)

SMA operates within the vehicle remarketing sector of the automotive industry and therefore complements the acquisition of the BCA Group. Goodwill represents the assembled workforce and geographic coverage which are not identified as intangible assets in their own right.

BCA Automotive (acquired 25 August 2015)

BCA Automotive operates vehicle transporters in the UK and therefore complements the acquisition of the BCA Group and SMA through its additional logistics expertise and geographical coverage. Goodwill arising on the acquisition represents the assembled workforce, logistics capabilities and buyer synergies arising from combining the operations of BCA Automotive with the logistics businesses within the BCA Group and SMA.

Ambrosetti (acquired 4 February 2016)

Ambrosetti specialises in vehicle preparation, refurbishment and defleet services as well as logistics services from its storage facilities in Northamptonshire and Kent. The acquisition therefore adds to the Group’s capability to provide services along the automotive value chain, from factory gates or port with technical and logistics services for new vehicles to refurbishment and logistics services for used vehicles and the core remarketing and auction operation. Goodwill represents the assembled workforce and geographic coverage which are not identified as intangible assets in their own right.

Fair values of the acquired assets and liabilities at acquisition are as follows:

The net movements of £3.7m since the Interim statement predominantly reflect updates to the property revaluations.

SMA BCA Automotive Ambrosetti Total

£m £m £m £m

Intangible assets: ‐ Brand 1.4 0.7 ‐ 2.1

‐ Vendor relationships 6.1 3.0 ‐ 9.1

‐ Buyer relationships 1.1 ‐ ‐ 1.1

‐ Software net book value 0.1 0.1 ‐ 0.2

Property, plant and equipment 16.7 18.0 0.6 35.3

Inventories 0.5 ‐ 0.1 0.6

Trade and other receivables 12.5 17.8 5.7 36.0

Cash and cash equivalents 3.9 2.0 ‐ 5.9

Trade and other payables (17.1) (27.8) (3.5) (48.4)

Deferred tax liability (1.7) (0.1) ‐ (1.8)

Borrowings and overdraft (16.7) ‐ (0.6) (17.3)

Pension liability ‐ (3.2) ‐ (3.2)

Net assets acquired 6.8 10.5 2.3 19.6

Goodwill 23.0 5.5 10.2 38.7

Consideration (settled in cash) 29.8 16.0 12.5 58.3


4. ACQUISITIONS (continued)

Breakdown of acquired receivables:

Impact of acquisitions

Note 3 shows the contribution of the acquisitions from the date of the respective transactions to 3 April 2016. Had all the acquisitions occurred on 1 January 2015, it is estimated that Group revenue and profit before tax for the 15 months to 3 April 2016 would have been £1,540.8m and £11.8m respectively. In determining these amounts management has assumed that the fair value adjustments that arose on the date of acquisition and all costs of acquisition would have been the same if the acquisitions had occurred on 1 January 2015.

5. CASH GENERATED FROM OPERATIONS

SMA BCA Automotive Ambrosetti Total

£m £m £m £m

Fair value of acquired receivables 10.8 16.9 4.5 32.2

Gross contractual amounts receivable 10.9 17.1 4.5 32.5

Contractual cash flows not expected to be received 0.1 0.2 ‐ 0.3

Note

Cash flows from operating activities £m £m


Adjustments for:

Income tax credit 7 (3.8) ‐

Finance income (0.3) ‐

Finance costs 12.7 ‐

Depreciation 7.8 ‐

Amortisation 43.6 ‐

Profit on sale of property, plant and equipment (0.2) ‐

Equity‐settled share based payments 0.6 ‐

Retirement benefit obligations (1.0) ‐

Acquisition costs 27.4 ‐

Changes in working capital:

Increase in inventories (3.7) ‐

Decrease in trade and other receivables 8.3 ‐

(Decrease)/increase in trade and other payables (7.7) 0.2

Decrease in provisions (1.5) ‐

Cash generated from operations 89.9 (0.1)

For the 15 months

ended

3 Apri l 2016

For the 8 months

ended

31 December

2014


6. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

An adjusted diluted earnings per share has been calculated using the weighted average number of shares in issue for the 12 month period from the Placing and acquisition of the BCA Group on 2 April 2015. Management believe this adjustment to the weighted average number of shares is consistent with the earnings of the BCA Group which are included for the same period.

Profit/(loss) for the period attributable to equity shareholders (£m) 7.7 (0.3)

Weighted average number of shares used in calculating basic earnings

per share (millions)630.2 5.2

Incremental shares in respect of employee share schemes 13.0 ‐

Weighted average number of shares used in calculating diluted earnings

per share643.2 5.2

Basic earnings/(loss) per share (pence) 1.2 (5.5)

Diluted earnings/(loss) per share (pence) 1.2 (5.5)

For the 15 months

ended

3 April 2016

For the 8 months

ended

31 December 2014

Note

£m £m

Profit/(loss) for the period attributable to equity shareholders 7.7 (0.3)

Add back:

Significant or non‐recurring costs 3 65.2 ‐

Tax credit on significant or non‐recurring costs (17.7) ‐

Adjusted earnings 55.2 (0.3)

m m

Weighted average number of shares used in calculating adjusted basic

earnings per share780.2 5.2

Incremental shares in respect of employee share schemes 13.1 ‐

Weighted average number of shares used in calculating adjusted diluted

earnings per share793.3 5.2

Adjusted basic earnings/(loss) per share (pence) 7.1 (5.5)

Adjusted diluted earnings/(loss) per share (pence) 7.0 (5.5)

For the 15 months

ended

3 April 2016

For the 8 months

ended

31 December 2014


7. INCOME TAX

The tax credit for the period differs from the standard rate of corporation tax in the UK of 20.2% (2014: 21.0%). The differences are explained below:

The standard rate of corporation tax in the UK reduced from 21.0% to 20.0% with effect from 1 April 2015 (2014: 23.0% to 21.0%). Accordingly, the Group’s profits for the accounting period ended 3 April 2016 are taxed at an effective rate of 20.2% (2014: 21.0%). Profits will be taxed at 19.0% from 1 April 2017 and 18.0% from 1 April 2020 as these rates were substantively enacted on 26 October 2015. Deferred taxes reported at the balance sheet date have been measured based on these rates.

Current taxation: £m £m

Current tax for the period 3.6 ‐

Adjustments in respect of prior periods ‐ ‐

Total current tax charge 3.6 ‐

Deferred taxation:

Origination and reversal of temporary differences 1.7 ‐

Tax rate adjustment (9.1) ‐

Total deferred tax credit (7.4) ‐

Income tax credit (3.8) ‐

For the 15 months

ended

3 April 2016

For the 8 months

ended

31 December 2014

£m £m

Profit/(loss) on ordinary activities before tax 3.9 (0.3)

Profit/(loss) on ordinary activities multiplied by the rate of

corporation tax in the UK of 20.2% (2014: 21.0%)0.8 (0.1)

Effects of:

Expenses not deductible for tax purposes 6.9 ‐

Income not subject to tax (2.5) ‐

Reduction in tax rate (9.1) ‐

Effect of different tax rates on profits earned outside the UK 0.5 ‐

Unrecognised tax losses (0.4) 0.1

Total taxation credit (3.8) ‐

For the 15 months

ended

3 Apri l 2016

For the 8 months

ended

31 December 2014


8. BANK BORROWINGS

As part of the acquisition of the BCA Group on 2 April 2015 the pre‐acquisition debt structure within the BCA Group was settled in full.

In April 2015, the Group agreed a five year committed £300m multi‐currency facility, including a £100m revolving facility and a £200m term facility, which was drawn down in full, net of transaction costs of £7.1m, and used as financing to repay the previous debt facility within the BCA Group of companies. The facility matures at the end of the five year period, with no repayment of capital due before that time.

In June 2015, the term facility was increased by £75m to a principal amount of £275m for further transaction costs of £0.6m, with no change to the maturity date. The additional drawdown was primarily used to fund the purchase of SMA and BCA Automotive. The total transaction costs of £7.7m, together with the interest expense, are being allocated to the income statement over the term of the facility at a constant rate on the carrying amount.

Carrying amounts are stated net of unamortised transaction costs. The fair value of bank borrowings is equal to the nominal value of the bank loan as the impact of discounting is not significant. The fair value of gross bank borrowings is £279.3m. The effective interest rate, including the impact of non‐utilisation fees on the £100m revolving facility and the utilisation fees for the letters of credit drawn down from the revolving facility, as well as the amortisation of debt issue costs is 3.5%.

The Group’s principal bank loans at 3 April 2016 were denominated in Sterling (£231.3m) and Euros (€60.0m), and bear variable interest based on LIBOR and EURIBOR respectively. They were secured by a fixed and floating charge over the Group’s present and future assets.

At 3 April 2016, the Group had issued letters of credit in the ordinary course of business of £5.5m and had the following undrawn borrowing facilities:

9. BUYER FINANCE BORROWINGS

The Group has an asset‐backed finance facility to fund the buyer finance business. This is a revolving facility that allows a drawdown of up to £60.0m. The amount is advanced solely to a buyer finance subsidiary in respect of specific receivables. Interest is charged on the drawn down element of the facility at a variable rate of interest, based on the Bank of England base rate. At 3 April 2016 the borrowings were £40.2m.

10. DIVIDENDS

An interim dividend of £15.6m (2.0p per share) was paid on 18 December 2015 to shareholders on the Register on 11 December 2015.

Since the balance sheet date dividends of 4.0p per qualifying Ordinary share have been proposed by the Directors, subject to approval by shareholders at the AGM. This will be payable on 30 September 2016 to shareholders on the Register on 23 September 2016. The dividends have not been provided for.

As at

3 April 2016

As at

31 December 2014

£m £m

Non‐current

Bank borrowings 273.1 ‐

As at

3 April 2016

As at

31 December 2014

£m £m

Floating rate borrowings

Expiring beyond one year 94.5 ‐


11. RELATED PARTY TRANSACTIONS

Remuneration of the Directors, who constitute the key management personnel of the Group, has been disclosed in the Directors’ remuneration report in the Annual Report and Accounts and includes, as disclosed in the Prospectus, a bonus paid to Avril Palmer‐Baunack on completion of the acquisition of the BCA Group. Other related party transactions with the Group are as follows:

Payments to Marwyn Capital LLP relate to acquisition fees and on‐going administrative and office services. On 23 October 2014 as amended on 20 March 2015, the Company entered into an agreement with Marwyn Capital LLP, a limited liability partnership in which James Corsellis and Mark Brangstrup Watts are managing partners, pursuant to which Marwyn Capital LLP agreed to provide corporate finance advice and various office and finance support services to the Company. In accordance with this agreement, a fee of £7,053,000 was paid to Marwyn Capital on the successful completion of the BCA Group acquisition and is included in the analysis above. This was in addition to the reimbursement of all out‐of‐pocket expenses incurred by Marwyn Capital LLP, including legal and other professional adviser costs.

Axio Capital Solutions Ltd, a company related to Marwyn, provides company secretarial services.

The Group has not made any provision for bad or doubtful debts in respect of related party debtors nor has any guarantee been given during the period regarding related party transactions.

£m £m £m £m

BCA Gestão de Pátios S.A. (0.1) ‐ 0.1 ‐ Marwyn Capi ta l LLP (7.7) ‐ ‐ ‐

Axio Capita l Solutions Ltd (0.1) ‐ ‐ ‐

Transaction amount Balance owed/(owing)

Related party relationship

For the 15 months

ended

3 Apri l 2016

For the 8 months

ended

31 December 2014

As at

3 Apri l 2016

As at

31 December 2014


12. PRINCIPAL RISKS AND UNCERTAINTIES

The Group faces a range of risks and uncertainties. Set out below are the principal risks and uncertainties that the Directors believe could have the most significant adverse impact on the Group’s business.

Risk Description

Economic environment

The Group could be impacted by any material adverse change in the general economic or geopolitical environment in the UK and the rest of Europe. Activity levels in the automotive industry can be affected by such factors as the availability of consumer credit, the growth of average wages and the level of unemployment, amongst others, which in turn could impact over time vehicle churn and the volume of vehicles passing through the Group’s remarketing Exchanges. Due to the relative size of the UK business as compared to the rest of Europe, the Group is more exposed to changes in the UK economic environment.

Strategic The Group’s future operating results are dependent, in part, on its success in implementing its strategic initiatives. The Group’s strategic initiatives are focused on expanding its Vehicle Remarketing operations and platforms, its Vehicle Buying division and its buyer finance business together with expanding the Group’s services businesses. For more detail see Our Strategy on page 11. These initiatives require extensive planning and management attention and therefore entail execution risk. The Group’s growth has, in part, been attributable to the acquisition of other businesses, and the Group may continue to expand its business through acquisitions and other business combinations in the future. Diversification of the Group through adding new business activities to the traditional core auction activity brings increased complexity and requires additional management resources and skills in order to execute the Group’s strategy of developing a more extensive automotive support services business.

Commercial The Group’s business is dependent on the supply of vehicles to its remarketing platforms. The Group’s key vendors provide large volumes of vehicles for resale and are typically large businesses having considerable resources. The loss of a number of these customers or a significant adverse change in the structure of the marketplace as regards the normal terms of business could have a material negative impact on the Group’s future performance.

Operational The Group incurs significant employment costs and competes with other service providers to recruit and retain employees. An increase in the wages and salaries necessary to attract and retain suitable employees may be necessary in the future. In addition, future legislative changes could necessitate an increase in payroll costs. The Group undertakes significant marketing activities, in particular for its Vehicle Buying division, and any material increase in advertising costs could increase the Group’s marketing expenses. In addition, the Group incurs significant fuel costs in its logistics operations that may escalate. If the Group is unable to pass on future cost increases to its customers, its operating profit margin could be impacted.

Competition There is competition for both the supply of vehicles and for the buyers of those vehicles. In the current marketplace, particularly in the UK, the Group has developed very high standards for physical auctions and nationwide vehicle buying, offering a wide portfolio of well‐situated sites which provide efficient solutions for customers and the ability to store and manage significant volumes of vehicles. These high standards need to be maintained to retain market share. With the increasing use of technology as new remarketing and distribution channels are created and trialled, the Group needs to ensure that it leads innovation and maintains its competitive advantage.

IT systems and information security

The Group’s business and financial performance depends on the effective operation of its information and technology systems. Any issues with the reliability, availability or security of the Group’s systems, online service offerings and business information could impact the Group’s reputation, the number of buyers or vendors or necessitate additional costs.


12. PRINCIPAL RISKS AND UNCERTAINTIES (continued)

Risk Description

Intellectual property and brand

The Group’s intellectual property rights include proprietary technology relating to online auction systems as well as trademarks of the Group’s brands, business knowledge and copyrights. The Group has well‐established names and brands in many of the markets in which it operates. Any significant damage to these could have an adverse impact on the Group’s performance.

Management The Group’s senior management has extensive experience in the industry in which the Group operates and has skills that are critical to the operation of the Group’s businesses and the execution of its strategy. A significant change in the Group’s senior management could weaken the Group’s business and its ability to execute its strategy.

Financial The Group reports its results in Sterling but operates in the UK and continental Europe and is therefore exposed to foreign currency exchange rate fluctuations. The Group’s strategy involves, amongst other things, growing areas of the business that include providing credit facilities to vehicle buyers and buying and holding vehicles in different countries as inventory, on a short‐term basis, prior to resale through the Group’s Exchanges. The Group relies on its finance providers to provide adequate debt to enable the Group to execute its strategies. The Group operates in multiple taxation regimes which increases the complexity and risk of compliance with certain indirect taxes such as VAT or its equivalent.

Regulation and legislation

The Group’s operations are subject to compliance with extensive laws and regulations, both in the UK and across continental Europe, including laws relating to vehicle brokerages and auctions, data protection, competition, consumer protection, health and safety, money laundering, bribery and taxation. Non‐compliance with or a change in these laws and regulations could adversely affect the reputation and performance of the Group.

Physical damage or loss

Natural events, such as hail storms and flooding or other events such as terrorism, large‐scale accidents or theft may impact the Group’s physical auction facilities or affect vehicles stored on the Group’s property awaiting sale or other activity. Whilst the Group maintains insurance cover for such risks, claims not covered by insurance could result in financial loss to the Group.

For more information bcamarketplaceplc.com

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