The results reflect the period before HH’s dramatic acquisition of larger rival InnerWorkings last summer.
In the year to 31 March 2020 sales at HH Global Group rose by 23% to £464.2m. Adjusted EBITDA grew from £19.13m to just under £26m, with corresponding margins increasing from 20.8% to 22%.
However, exceptional items of almost £11m, together with one-off share-based payments and related taxes of £45.8m, saw the group post an operating loss of £49.1m.
In his report, chief executive Robert MacMillan said the period had been “momentous” for the group, “delivering record results, delivering a new refinancing structure and for the first time, accepting a significant minority equity investment from an external partner”.
Blackstone took a 25%, £100m stake in the business in February 2020.
Following that transaction, share options and equity units previously issued to certain directors and employees vested, resulting in a one-off charge of £42.8m.
The vested shares were sold for a mixture of cash and shares in HH’s new ultimate parent company.
Regarding the impact of Covid-19, HH said that it was first exposed to the virus in Q1 2020 at its Asia Pacific operations, and it had subsequently affected all of its markets.
However, the Leatherhead-headquartered group said that trading between March-September 2020 had been “resilient” and ahead of the prior year in terms of adjusted EBITDA.
At the beginning of October the group also secured an additional revolving credit facility of £25m.
The business stress-tested a “worst case” scenario involving sales falling by 25%, which could potentially result in a covenant breach, although the directors said they felt this likelihood was “remote in light of current trading” and they would be able to take mitigating actions to flex HH’s cost base if that became necessary.
Earlier this month HH acquired the Marketing Services division of identity verification and fraud prevention group GBG PLC.
The acquired business has sales of around £3.98m and will become part of HH Global Interactive, formerly Blueberry Wave.
HH has also just been awarded Lot 1 of the Crown Commercial Service’s framework for Print Management, following a competitive tender process. The agreement runs until the end of 2024.
MacMillan said he was delighted to secure the new award.
“Over the last four years, our position on Lot 2 of the previous framework allowed us to prove that our model delivers value and reduced risk for public sector clients,” he said.
“I see our new position on Lot 1 as the enabler to deliver these benefits to far more government and local authority buyers, and my whole team is excited at the prospect of managing services that deliver some of the most critical and prestigious print items in the UK.”
