TIDMCRL
RNS Number : 9784W
Creightons PLC
30 December 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2021
Interim Dividend Declaration
Financial highlights
-- Excellent progress in offsetting the loss of the "one off"
GBP11.54m hygiene sales over the same period in the previous
year.
-- The above success contained the overall sales reduction to GBP2.37m (7.3%).
-- The total net sales for the six months were GBP30.00m (2020: GBP32.37m).
-- Gross margin percentage increased by 3.4% to 42.7% (2020: 39.3%).
-- The success in closing the GBP11.54m hygiene gap limited the
negative impact on operating profit before exceptional costs to
GBP0.42m (13.9%). The operating profit before exceptional costs was
GBP2.60m (2020: GBP3.01m).
-- Operating profit before exceptional costs as a percentage of
sales decreased by 0.7% to 8.6% (2020: 9.3%).
-- Profit after tax as a percentage of sales decreased by 0.9% to 6.6% (2020: 7.5%).
-- Diluted EPS 2.61p (2020: 3.31p).
-- Short term borrowings and loans of GBP2.90m (2020: Positive net cash on hand of GBP2.38m).
-- Interim dividend of 0.15p per ordinary share to be paid in February 2022 (2020: 0.15p).
Operational highlights
-- Better than expected success in replacing the previous year's
"one off" hygiene sales generated by the Covid-19 pandemic which
were a total of GBP14.59m in the previous full year to March 2021.
These hygiene sales were very significant so to have substantially
replaced in the first half by growth in core sales across branded,
private label and contract business units before the full impact of
recent acquisitions reflects the underlying strength and momentum
of the business.
-- Successfully completed acquisition of two businesses; Emma
Hardie and Brodie & Stone. Their integration is progressing
well and the full benefits will emerge by the beginning of the new
financial year.
-- The global supply chain issues and raw material cost although
challenging are being managed proactively by our team. The
management team have developed a real-time cost indexing system
which monitors all cost increases. This system facilitates a timely
and proactive dialogue with retailers justifying price
increases.
-- Costs of Covid 19 defences very much reduced compared to
previous year - however management remain vigilant in the face of
the ongoing Covid-19 threat.
Chairman's statement
I am pleased to report that the Group has made significant
progress in growing its core business during the first half year
ended 30 September 2021. Core sales have increased by GBP8.37m
(40.2%) which has substantially replaced the Covid-19 related
hygiene sales which were a once off feature of the previous half
year. We have also successfully completed two acquisitions in the
period - Emma Hardie and Brodie & Stone - which will further
strengthen the underlying branded business. The Group's performance
is a tribute to the agility and resilience of the teams who have
again demonstrated the ability to take advantage of available
opportunities and manage potential risks.
Sales and margin
Revenue from core business excluding hygiene and acquisitions
increased by GBP8.37m to GBP29.21m (2020: GBP20.84m). Overall Group
sales were GBP30.00m for the six months ended 30 September 2021
(2020: GBP32.37m) a reduction of GBP2.37m (7.3%). Sales of hygiene
products which were a short term feature of the previous year
declined by GBP11.54m. We have been successful in substantially
replacing the once off hygiene sales by growth in each of the three
business units. Branded sales (excluding hygiene and acquisitions)
increased by 47.0% from GBP5.47m to GBP8.04m with a strong
performance from Feather & Down and Balance Active brands.
Private label sales have increased from GBP10.76m to GBP13.09m and
have returned to pre-Covid levels with the re-opening of the High
street and the addition of a large contract with a key grocer.
Contract manufacturing sales have increased from GBP4.60m to
GBP8.08m with all major customers responding to increased consumer
demand. Sales of Emma Hardie GBP0.77m and Brodie & Stone
GBP0.02m have been included from the dates of acquisition of 28(th)
July 2021 and 24(th) September 2021 respectively.
Our gross margin was 42.7% in the six months to 30 September
2021 (2020: 39.3%). The main reasons for the increase in margin are
a reduction in Covid-19 related costs from the prior period
including, reductions in costs related to the airfreighting,
reduction in stock provisions set aside relating to hygiene
products and a reduction in additional employee welfare cost
together with a return to normal levels of productivity.
Overheads
Distribution costs have decreased by 2.3% to GBP1.67m (2020:
GBP1.71m) and now represent 5.5% of sales (2020: 5.3%). The overall
cost reduction is driven by the reduction in revenue. Underlying
costs associated with outsourcing the warehousing are increasing in
line with domestic supply pressures. Most of our total finished
good's stocks are now stored at third parties.
Administration costs have increased by 6.9% to GBP8.55m (2020:
GBP8.00m) with costs increasing to manage the significant increase
in core activity over the period. We are continuing to strengthen
the management structure through a number of senior appointments to
position the Group for future growth and have awarded pay increases
to employees in the period.
Overheads include GBP0.09m (2020: GBP0.34m) of additional
employee-welfare costs associated with Covid-19.
Acquisition costs
Acquisition costs of GBP0.22m in relation to the purchase of
Emma Hardie and Brodie & Stone have been charged to the income
statement as exceptional costs during the period.
Operating profit before exceptional costs
Operating profit before exceptional costs was GBP2.60m (2020:
GBP3.01m), which represents a decrease of GBP0.42m (13.9%). The
reduction in overall sales together with the increased overhead
costs results in an operating profit margin before exceptional
costs of 8.6% (2020: 9.3%).
Tax
The tax charge provided in the accounts of GBP0.28m (2020:
GBP0.48m) represents a rate of 12.3% (2020: 16.4%).
Earnings per share
The result of the above, including the issue of equity on the
two acquisitions of 2.6m shares, is a reduction in the diluted
earnings per share to 2.61p (2020: 3.31p) a decrease of 21.1%.
Dividend Payments
The Board confirms that it will be paying an interim dividend of
0.15 pence per ordinary share (2020: 0.15 pence per ordinary
share), reflecting the continued strong performance of the Group to
30 September 2021. This will be paid in February 2022. This is in
addition to the final dividend of 0.50 pence per ordinary share
paid in October 2021 (2020: 0.50 pence per ordinary share). The
total payment in relation to the dividend paid in October 2021 was
GBP0.32m (2020: GBP0.32m).
Working capital
Short term borrowings and loans of GBP2.90m (2020: net cash on
hand GBP2.38m). The reduction in net cash on hand is mainly due to
the cash utilised to finance the two recent acquisitions which
resulted in cash outflows in the period of GBP7.53m. The company
has access to cash by way of an invoicing finance facility that is
currently in place and could support the cash position by up to a
further GBP5m. Also, we have increased our investment in working
capital in the period with increase in inventories of 43.7% and
trade debtors of 19.3% including the working capital from
acquisitions. Trade debtors have increased due to the profile of
revenue throughout the period. The second half of the year will see
these levels fall as the cash is received. Trade and other payables
remain fairly consistent. Borrowings have increased due to
utilisation of an overdraft and invoice financing facility. A term
loan of GBP3.00m to be repaid over four years has been drawn in the
period to fund the investment in acquisitions.
Brexit
Brexit has occurred and has resulted in some increased long-term
costs associated with the regulatory management and import and
export administration. These have not materially impacted upon the
Group's performance.
Covid-19
The Group has continued to respond to the challenges presented
by Covid-19 and has ensured continuity of supply to our customers
and maintained uninterrupted production at our Peterborough and
Tiverton facilities. The sales of hygiene products which were a
feature of the previous year's sales have not repeated in the
current year.
We will continue to remain vigilant and responsive in the face
of the evolving threat from Covid-19 including the Omicron variant,
prioritising the health and safety of our employees.
Supply chain
The Group has again demonstrated its ability to respond to
market events and opportunities by replacing one off hygiene sales
with growth in its core underlying business and the completion of
two acquisitions. In common with many UK businesses, we have
experienced global supply chain pressures throughout the period
which have manifested in the form of delayed deliveries from
suppliers, higher input and overhead costs. We have successfully
managed these issues in the period and maintained supply to our
customers. These pressures are expected to continue into the second
half and we will continue to be proactive in our response to these
challenges. In particular we will seek out new opportunities and
endeavour to mitigate any price increases through price recovery,
product reengineering, alternative sourcing and other cost control
measures.
I would like to take this opportunity to thank each and every
one of the Group's employees who have continued to pull together
through an exceptionally difficult period to enable the Group to
deliver a strong trading performance. I would also like to thank
our customers, shareholders and suppliers for their support and
loyalty to the Group.
W O McIlroy
Executive Chairman 29 December 2021
Responsibility statement
The names and functions of the Directors of the Company are as
follows:
William O McIlroy Executive Chairman and Chief Executive
Bernard JM Johnson Executive Managing Director
Nicholas DJ O'Shea Non-executive Director and Group Company Secretary
William T Glencross Non-executive Director
Martin Stevens Deputy Managing Director
Philippa Clark Deputy Managing Director
Paul Forster Non-executive Director
The Board confirms that to the best of its knowledge the
condensed set of financial statements gives a true and fair view of
the assets and liabilities, financial position and profit of the
Group and has been prepared in accordance with IAS 34 'Interim
Financial Reporting', as endorsed by the UK and that the interim
management report includes a fair review of the information
required by the Disclosure and Transparency Rules as issued by the
Financial Conduct Authority, namely:
-- DTR 4.2.7: An indication of important events that have
occurred during the first six months of the financial year, and
their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year.
-- DTR 4.2.8: Details of related party transactions that have
taken place in the first six months of the current financial year
and that have materially affected the financial position or
performance of the enterprise during that period. Together with any
changes in the related parties transactions described in the last
annual report that could have a material effect on the enterprise
in the first six months of the current financial year.
Going Concern
The directors are pleased to report that the Group continues to
meet its debt obligations and expects to operate comfortably within
its available borrowing facilities. The Group's cash on hand at 30
November 2021 is GBP0.27m. A reduction in revenue of 33%, which is
significantly more severe than was seen in the first two months of
the Covid-19 pandemic, without management tackling current overhead
levels, over the next 12 months, would not fully utilise the
Group's available working capital resources. The directors have
therefore formed a judgement, at the time of approving the
financial statements, that there is a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future being at least twelve months
from the date of this report. For this reason, the directors
continue to adopt the going concern basis in preparing the
financial statements.
By order of the Board
Nicholas O'Shea
Company Secretary and Director 29 December 2021
Principal risks and uncertainties
The Board regularly monitors exposure to key risks, such as
those related to production efficiencies, cash position and
competitive position relating to sales. It has also taken account
of the economic situation over the past 6 months, and the impact
that has had on costs and consumer purchases.
It also monitors those risks not directly or specifically
financial, but capable of having a major impact on the business's
financial performance if there is any failure, such as product
contamination and manufacture outside specification, maintenance of
satisfactory levels of customer and consumer service, accident
ratios, failure to meet environmental protection standards or any
of the areas of regulation mentioned above.
The principal risks and uncertainties and their associated
mitigating and monitoring controls which may affect the Group's
performance in the next six months are consistent with those
detailed in the Annual Report and Financial Statements 2021. The
main two risks facing the Group relate to the Covid-19 pandemic and
the global and domestic supply chain issues, which are covered in
detail in the Chairman's statement.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2021
Consolidated income statement - unaudited
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
----- -------------- -------------- ------------
Revenue 30,005 32,375 61,605
----- -------------- -------------- ------------
Cost of sales (17,201) (19,650) (36,623)
----- -------------- -------------- ------------
Gross profit 12,804 12,725 24,982
----- -------------- -------------- ------------
Distribution costs (1,662) (1,713) (3,353)
----- -------------- -------------- ------------
Administrative expenses (8,547) (7,998) (16,236)
----- -------------- -------------- ------------
Operating profit - before
exceptional costs 2,595 3,014 5,393
----- -------------- -------------- ------------
Exceptional costs - acquisition (221) - -
expenses
----- -------------- -------------- ------------
Operating profit 2,374 3,014 5,393
----- -------------- -------------- ------------
Finance costs 6 (108) (119) (222)
----- -------------- -------------- ------------
Profit before tax 2,266 2,895 5,171
----- -------------- -------------- ------------
Taxation 4 (278) (475) (837)
----- -------------- -------------- ------------
Profit for the year from operations
attributable to the equity
shareholders of the parent
Company 1,988 2,420 4,334
------------------------------------- ----- -------------- -------------- ------------
Dividends
Note Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
Paid in year (GBP000) - - 421
-------------- -------------- ------------
Paid in year (pence per share) - - 0.65p
-------------- -------------- ------------
Proposed (GBP000) 98 97 324
-------------- -------------- ------------
Proposed (pence per share) 0.15p 0.15p 0.50p
-------------- -------------- ------------
Earnings per share
Note Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
Basic 3 3.05p 3.74p 6.69p
----- -------------- -------------- ------------
Diluted 2.61p 3.31p 5.89p
----- -------------- -------------- ------------
Consolidated statement of comprehensive income - Unaudited
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---- -------------- -------------- ------------
Profit for the year 1,988 2,420 4,334
-------------- -------------- ------------
Items that may be subsequently
reclassified to profit and
loss:
---- -------------- -------------- ------------
Exchange differences on translating
foreign operations (39) (33) 9
-------------- -------------- ------------
Other comprehensive income
for the year (39) (33) 9
-------------- -------------- ------------
Total comprehensive income
for the year attributable
to the equity shareholders
of the parent 1,949 2,387 4,343
------------------------------------------- -------------- -------------- ------------
Consolidated balance sheet - unaudited
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
----- -------------- -------------- ------------
Non-current assets
----- -------------- -------------- ------------
Goodwill 331 331 331
----- -------------- -------------- ------------
Other intangible assets 8 10,951 940 818
----- -------------- -------------- ------------
Property, plant and equipment 6,012 6,011 5,857
----- -------------- -------------- ------------
Right-of-use assets 977 1,023 1,090
----- -------------- -------------- ------------
Deferred tax asset 503 59 339
----- -------------- ------------
18,774 8,364 8,435
----- -------------- -------------- ------------
Current assets
----- -------------- -------------- ------------
Inventories 13,178 9,170 8,318
----- -------------- -------------- ------------
Trade and other receivables 15,608 13,087 10,236
----- -------------- -------------- ------------
Cash and cash equivalents 1,013 2,751 6,558
----- -------------- -------------- ------------
29,799 25,008 25,112
----- -------------- -------------- ------------
Total assets 48,573 33,372 33,547
----- -------------- -------------- ------------
Current liabilities
----- -------------- -------------- ------------
Trade and other payables 12,192 10,800 9,177
----- -------------- -------------- ------------
Corporation tax payable 200 428 329
----- -------------- -------------- ------------
Lease liabilities 249 206 237
----- -------------- -------------- ------------
Borrowings 3,669 162 166
----- -------------- -------------- ------------
Deferred and contingent consideration 7 1,628 - -
----- -------------- -------------- ------------
17,938 11,596 9,909
----- -------------- -------------- ------------
Net current assets 11,861 13,412 15,203
----- -------------- -------------- ------------
Non-current liabilities
----- -------------- -------------- ------------
Lease liabilities 777 870 906
----- -------------- -------------- ------------
Borrowings 4,827 2,735 2,646
----- -------------- -------------- ------------
5,604 3,605 3,552
----- -------------- -------------- ------------
Total liabilities 23,542 15,201 13,461
----- -------------- -------------- ------------
Net assets 25,031 18,171 20,086
----- -------------- -------------- ------------
Equity
----- -------------- -------------- ------------
Share capital 675 647 648
----- -------------- -------------- ------------
Share premium account 3,886 1,406 1,410
----- -------------- -------------- ------------
Other reserves 25 25 25
----- -------------- -------------- ------------
Translation reserve (9) (12) 30
----- -------------- -------------- ------------
Retained earnings 20,454 16,105 17,973
----- -------------- -------------- ------------
Total equity attributable
to the equity shareholders
of the parent Company 25,031 18,171 20,086
--------------------------------------- ----- -------------- -------------- ------------
Statement of changes in shareholders' equity - unaudited
Share Share Other Translation Retained Total
capital premium reserves reserve earnings equity
account
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- --------- ---------- ------------ ---------- --------
At 1 April 2020 647 1,406 25 21 13,467 15,566
--------- --------- ---------- ------------ ---------- --------
Comprehensive income for
the six months ended 30
September 2020
--------- --------- ---------- ------------ ---------- --------
Profit for the six months
ended 30 September 2020 - - - - 2,420 2,420
--------- --------- ---------- ------------ ---------- --------
Exchange differences on
translation of foreign operations - - - (33) - (33)
--------- --------- ---------- ------------ ---------- --------
Total comprehensive income
for the six months ended
30 September 2020 - - - (33) 2,420 2,387
--------- --------- ---------- ------------ ---------- --------
Contributions by and distributions
to owners
--------- --------- ---------- ------------ ---------- --------
Share-based payment charge - - - - 80 80
--------- --------- ---------- ------------ ---------- --------
Deferred tax through Equity - - - - 138 138
--------- --------- ---------- ------------ ---------- --------
Dividends - - - - - -
--------- --------- ---------- ------------ ---------- --------
Total contributions by and
distributions to owners - - - - 218 218
--------- --------- ---------- ------------ ---------- --------
At 30 Sept 2020 647 1,406 25 (12) 16,105 18,171
--------- --------- ---------- ------------ ---------- --------
Comprehensive income for
the six months ended 30
March 2021
--------- --------- ---------- ------------ ---------- --------
Profit for the six months
ended 31 March 2021 - - - - 1,914 1,914
--------- --------- ---------- ------------ ---------- --------
Exchange differences on
translation of foreign operations - - - 42 - 42
--------- --------- ---------- ------------ ---------- --------
Total comprehensive income
for the six months ended
31 March 2021 - - - 42 1,914 1,956
--------- --------- ---------- ------------ ---------- --------
Contributions by and distributions
to owners
--------- --------- ---------- ------------ ---------- --------
Exercise of options 1 4 - - - 5
--------- --------- ---------- ------------ ---------- --------
Share-based payment charge - - - - 115 115
--------- --------- ---------- ------------ ---------- --------
Deferred tax through Equity - - - - 260 260
--------- --------- ---------- ------------ ---------- --------
Dividends - - - - (421) (421)
--------- --------- ---------- ------------ ---------- --------
Total contributions by and
distributions to owners 1 4 - - (46) (41)
--------- --------- ---------- ------------ ---------- --------
At 31 March 2021 648 1,410 25 30 17,973 20,086
--------- --------- ---------- ------------ ---------- --------
Comprehensive income for
the six months ended 30
September 2021
--------- --------- ---------- ------------ ---------- --------
Profit for the six months
ended 30 September 2021 - - - - 1,988 1,988
--------- --------- ---------- ------------ ---------- --------
Exchange differences on
translation of foreign operations - - - (39) - (39)
--------- --------- ---------- ------------ ---------- --------
Total comprehensive income
for the six months ended
30 September 2021 - - - (39) 1,988 1,949
--------- --------- ---------- ------------ ---------- --------
Contributions by and distributions
to owners
--------- --------- ---------- ------------ ---------- --------
Exercise of options - - - - - -
--------- --------- ---------- ------------ ---------- --------
Issue of shares 27 2,476 - - - 2,503
--------- --------- ---------- ------------ ---------- --------
Share-based payment charge - - - - 165 165
--------- --------- ---------- ------------ ---------- --------
Deferred tax through Equity - - - - 328 328
--------- --------- ---------- ------------ ---------- --------
Dividends - - - - - -
--------- --------- ---------- ------------ ---------- --------
Total contributions by and
distributions to owners 27 2,476 - - 493 2,996
--------- --------- ---------- ------------ ---------- --------
At 30 Sept 2021 675 3,886 25 (9) 20,454 25,031
--------- --------- ---------- ------------ ---------- --------
Consolidated cash flow statement - unaudited
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---- -------------- -------------- ------------
Profit from operations 2,374 3,014 5,393
-------------- -------------- ------------
Adjustments for:
---- -------------- -------------- ------------
Depreciation on property,
plant and equipment 432 395 846
-------------- -------------- ------------
Depreciation on right of use
assets 113 97 206
-------------- -------------- ------------
Amortisation of intangible
assets 209 252 497
-------------- -------------- ------------
Loss on disposal of property,
plant and equipment 10 - 4
-------------- -------------- ------------
Loss on disposal of Right-of-use
asset - - 5
------------------------------------------- -------------- -------------- ------------
Share based payment charge 165 80 195
-------------- -------------- ------------
3,303 3,838 7,146
------------------------------------------ -------------- -------------- ------------
Increase in inventories (3,211) (1,776) (924)
-------------- -------------- ------------
Increase in trade and other
receivables (3,931) (4,219) (1,369)
-------------- -------------- ------------
Increase in trade and other
payables 1,894 2,960 1,337
-------------- -------------- ------------
Taxation paid (291) (174) (684)
-------------- -------------- ------------
Net cash from operating activities (2,236) 629 5,506
-------------- -------------- ------------
Investing activities
---- -------------- -------------- ------------
Purchase of property, plant
and equipment (608) (450) (869)
-------------- -------------- ------------
Purchase of right of use assets - - (34)
------------------------------------------- -------------- -------------- ------------
Proceeds from sale and lease
back (IAS 17) - - 174
-------------- -------------- ------------
Purchase of intangible assets (167) (221) (344)
-------------- -------------- ------------
Repayment of debt - Brodie (489) - -
& Stone
---- -------------- -------------- ------------
Acquisition of Brodie & Stone (2,807) - -
---- -------------- -------------- ------------
Repayment of debt - Emma Hardie (1,457) - -
---- -------------- -------------- ------------
Acquisition of Emma Hardie (2,775) - -
---- -------------- -------------- ------------
Proceeds on disposal of investments - - -
---- -------------- -------------- ------------
Net cash used in investing
activities (8,303) (671) (1,073)
-------------- -------------- ------------
Financing activities
---- -------------- -------------- ------------
Proceeds on issue of shares - - 5
-------------- -------------- ------------
Principal paid on lease liabilities (116) (92) (188)
-------------- -------------- ------------
Interest on leases liabilities (62) (68) (139)
-------------- -------------- ------------
Interest paid on mortgage
loan (44) (47) (89)
-------------- -------------- ------------
Interest paid on overdrafts
and loans (2) (4) (4)
-------------- -------------- ------------
Increase in invoice financing 1,344 - -
utilisation
---- -------------- -------------- ------------
Increase/(decrease) of overdraft 948 (554) (554)
-------------- -------------- ------------
Draw down of loan facility 3,000 - -
---- -------------- -------------- ------------
Repayment on mortgage loan
facility (82) (79) (164)
-------------- -------------- ------------
Dividends paid to owners of
the parent - - (421)
-------------- -------------- ------------
Net cash used in financing
activities 4,986 (844) (1,554)
-------------- -------------- ------------
Net decrease in cash and cash
equivalents (5,553) (886) 2,879
-------------- -------------- ------------
Cash and cash equivalents
at start of year 6,558 3,670 3,670
-------------- -------------- ------------
Effect of foreign exchange
rate changes 8 (33) 9
-------------- -------------- ------------
Cash and cash equivalents
at end of year 1,013 2,751 6,558
-------------- -------------- ------------
Notes to the unaudited interim financial report
1. Basis of preparation
The interim financial statements for the six months ended 30
September 2020 and 30 September 2021 and for the twelve months
ended 31 March 2021 do not constitute statutory accounts for the
purposes of Section 434 of the Companies Act 2006. The Annual
Report and Financial Statements for the year ended 31 March 2021
have been filed with the Registrar of Companies. The Independent
Auditors' Report on the Annual Report and Financial Statements for
the year ended 31 March 2021 was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under sections 498(2) or 498(3) of the Companies Act
2006. The 30 September 2021 statements were approved by the Board
of Directors on 29 December 2021. This unaudited interim report has
not been audited or reviewed by auditors pursuant to the Financial
Reporting Council guidance on Review of Interim Financial
Information.
The condensed financial statements in this Interim Report have
been prepared in accordance with the requirements of IAS 34
'Interim Financial Reporting' as endorsed by the UK.
As required by the Disclosure and Transparency Rules of the UK's
Financial Conduct Authority, the condensed set of financial
statements has been prepared by applying the accounting policies
and presentation that were applied in the preparation on the
Company's published consolidated financial statements for the year
ended 31 March 2021, which were prepared in accordance with
International Financial Reporting Standards as endorsed by the
UK.
The condensed interim financial statements for the six months
ended 30 September 2021 and the comparative figures for the six
months ended 30 September 2020 are unaudited. The figures for the
year ended 31 March 2021 have been extracted from the Annual Report
on which the Auditors issued an unqualified audit report and which
have been filed with the Registrar of Companies.
2. Significant accounting policies
Business combinations
Acquisition of subsidiaries and businesses are accounted for
using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated
as the sum of the acquisition-date fair values of assets
transferred to the Group, less liabilities incurred in exchange for
control of the entity acquired. Acquisition related costs are
recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and
the liabilities assumed are recognised at their fair value,
except:
-- deferred tax assets or liabilities and assets or liabilities
related to employee benefit arrangements that are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee
Benefits respectively; and
-- assets that are classified as held for sale in accordance
with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that standard.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquired entity, and the fair value of the
acquirer's previously held equity interests in the acquiree (if
any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the
identifiable assets acquired and liabilities assumed exceeds the
sum of the consideration transferred, the amount of any
non-controlling interest in the acquired entity and the fair value
of the acquirer's previously held interests in the acquired entity
(if any), the excess is recognised immediately in profit or loss as
a purchase gain.
Adoption of new and revised accounting standards
No new standards impacting on the Group have been adopted in its
financial statements for the year ended 31 March 2021 or the
interims ended 30 September 2021.
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided
not to adopt early. The Group does not expect any of the standards
issued by the IASB, but not yet effective, to have a material
impact on the Group.
3. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---- -------------- -------------- ------------
Earnings
---- -------------- -------------- ------------
Net profit attributable to
the equity holders of the
parent company 1,988 2,420 4,334
-------------- -------------- ------------
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
Number Number Number
---- -------------- -------------- ------------
Number of shares
---- -------------- -------------- ------------
Weighted average number of
ordinary shares for the purposes
of basic earnings per share 65,196,505 64,746,143 64,757,807
----------------------------------------- -------------- -------------- ------------
Effect of dilutive potential
ordinary shares relating
to share options 10,915,679 8,356,145 8,788,756
-------------- -------------- ------------
Weighted average number of
ordinary shares for the purposes
of diluted earnings per share 76,112,184 73,102,288 73,546,563
-------------- -------------- ------------
4. Taxation
Six months Six months Year ended
ended 30 ended 30 September 31 March
September 2020 2021
2021
(Unaudited) (Unaudited) (Audited)
----
GBP000 GBP000 GBP000
---- -------------- -------------------- ------------
Current tax 162 441 782
-------------- -------------------- ------------
Deferred tax liability 116 34 55
-------------- -------------------- ------------
Total 278 475 837
-------------- -------------------- ------------
5. Notes to cash flow statement
Analysis of changes in net debt
6 months ended 30 September Overdraft Invoice Mortgage Total
2021 Financing & Term Loan
GBP000 GBP000 GBP000 GBP000
---------- ----------- ------------- -------
At 1 April 2021 - - 2,812 2,812
---------- ----------- ------------- -------
Cash flows 948 1,818 2,874 5,640
---------- ----------- ------------- -------
Interest accruing - - 44 44
---------- ----------- ------------- -------
At 30 September 2021 948 1,818 5,730 8,496
----------------------------- ---------- ----------- ------------- -------
6 months ended 30 September Overdraft Invoice Mortgage Total
2020 Financing
GBP000 GBP000 GBP000 GBP000
---------- ----------- ------------- -------
At 1 April 2020 554 - 2,975 3,529
---------- ----------- ------------- -------
Cash flows (554) - (126) (680)
---------- ----------- ------------- -------
Interest accruing - - 47 47
---------- ----------- ------------- -------
At 30 September 2020 - - 2,896 2,896
----------------------------- ---------- ----------- ------------- -------
12 months ended 31 March Overdraft Invoice Mortgage Total
2021 Financing
GBP000 GBP000 GBP000 GBP000
---------- ----------- ------------- -------
At 1 April 2020 554 - 2,975 3,529
---------- ----------- ------------- -------
Cash flows (554) - (252) (806)
---------- ----------- ------------- -------
Interest accruing - - 89 89
---------- ----------- ------------- -------
At 31 March 2021 - - 2,812 2,812
----------------------------- ---------- ----------- ------------- -------
6. Finance costs
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---- -------------- -------------- ------------
Interest on bank overdrafts
and loans 2 4 4
-------------- -------------- ------------
Interest on mortgage 44 47 79
-------------- -------------- ------------
Interest on lease liabilities 62 68 139
-------------- -------------- ------------
Total 108 119 222
-------------- -------------- ------------
7. Business combinations
The provisional amounts recognised in respect of the estimated
fair value of identifiable assets and liabilities for the
acquisitions made during the six months to September 2021 was:
Brodie and Emma Hardie Total
Stone Limited Limited
Fair value Fair value Fair value
--------------- ------------ -----------
GBP000 GBP000 GBP000
--------------- ------------ -----------
Property, plant and equipment - 1 1
--------------- ------------ -----------
Intangible assets - 58 58
--------------- ------------ -----------
Inventory 304 1,344 1,648
--------------- ------------ -----------
Trade receivable 434 758 1,192
--------------- ------------ -----------
Other debtors - 249 249
--------------- ------------ -----------
Cash at bank - 85 85
--------------- ------------ -----------
Borrowings (463) (474) (937)
--------------- ------------ -----------
Trade payables (141) (426) (567)
--------------- ------------ -----------
Taxation and social security (19) (93) (112)
--------------- ------------ -----------
Other creditor (242) (1,225) (1,467)
--------------- ------------ -----------
Redemption of C shares - (544) (544)
--------------- ------------ -----------
Total net assets (127) (267) (394)
--------------- ------------ -----------
Intangible assets on business combination
- Brand value 4,980 5,127 10,107
--------------- ------------ -----------
Total consideration due 4,853 4,860 9,713
--------------- ------------ -----------
The consideration was satisfied
as follows:
--------------- ------------ -----------
Cash consideration 2,807 2,775 5,582
--------------- ------------ -----------
Property retention 700 - 700
--------------- ------------ -----------
Deferred consideration 200 84 284
--------------- ------------ -----------
Contingent consideration - 644 644
--------------- ------------ -----------
Share issue 1,146 1,357 2,503
--------------- ------------ -----------
4,853 4,860 9,713
--------------- ------------ -----------
Business combinations made in 2021
Emma Hardie
On 28th July 2021, the Group acquired 100% of the issued share
capital of Emma Hardie Limited. Total consideration was GBP4.86m,
of which GBP2.77m was paid in cash, GBP1.36m was settled by the
issue of 1,600,000 shares in Creightons PLC at a price of GBP0.8478
per share, and there was GBP0.084m of deferred consideration and a
further GBP0.644m in contingent consideration. There was cash
acquired of GBP0.09m and debt acquired at fair value of
GBP2.34m.
The contingent consideration of GBP0.644m relates to the share
issue on acquisition of Emma Hardie Limited. The company has
guaranteed to the sellers of Emma Hardie Limited a share price for
Creightons PLC at GBP1.25 per share as at 28th July 2022. The
contingent consideration has been accrued based on the difference
between GBP1.25 and the market price on date of acquisition.
The provisional fair value of acquired intangible assets is
GBP5.13m and relates to the Emma Hardie brand acquired. The
intangible asset is deemed to have an indefinite useful life so no
amortisation is charged but will be subject to an annual impairment
review.
Brodie & Stone
On 24th September 2021, the Group acquired 100% of the issued
share capital of Brodie and Stone Holdings Limited, and its wholly
owned subsidiary Brodie and Stone International Limited. Total
consideration was GBP4.85m, of which GBP2.81m was paid in cash,
GBP1.15m was settled by the issue of 1,000,000 shares in Creightons
PLC at a price of GBP1.146 per share, GBP0.70m in relation to a
property retention payment paid in October, and there was GBP200k
of deferred consideration. There was no cash acquired and debt
acquired at fair value of GBP0.72m.
The provisional fair value of acquired intangible assets is
GBP4.98m and relates to various brands acquired. The intangible
asset is deemed to have an indefinite useful life so no
amortisation is charged but will be subject to an annual impairment
review.
8. Other intangible assets
Note Computer Intellectual Product Brand Total
software property development
costs
GBP000 GBP000 GBP000 GBP000 GBP000
----- ----------------- ---------------- ----------------- ---------------- ------------
Cost
----- ----------------- ---------------- ----------------- ---------------- ------------
At 31 March 2020 251 10 2,847 508 3,616
----- ----------------- ---------------- ----------------- ---------------- ------------
Additions 2 - 219 - 221
----- ----------------- ---------------- ----------------- ---------------- ------------
At 30 September
2020 253 10 3,066 508 3,837
----- ----------------- ---------------- ----------------- ---------------- ------------
Additions 9 - 114 - 123
----- ----------------- ---------------- ----------------- ---------------- ------------
At 31 March 2021 262 10 3,180 508 3,960
----- ----------------- ---------------- ----------------- ---------------- ------------
Additions 5 2 - 233 10,107 10,342
----- ----------------- ---------------- ----------------- ---------------- ------------
At 30 September
2021 264 10 3,413 10,615 14,302
----- ----------------- ---------------- ----------------- ---------------- ------------
Accumulated
amortisation
----- ----------------- ---------------- ----------------- ---------------- ------------
At 31 March 2020 167 - 2,478 - 2,645
----- ----------------- ---------------- ----------------- ---------------- ------------
Amortisation in
period 14 - 238 - 252
----- ----------------- ---------------- ----------------- ---------------- ------------
At 30 September
2020 181 - 2,716 - 2,897
----- ----------------- ---------------- ----------------- ---------------- ------------
Amortisation in
period 14 - 231 - 245
----- ----------------- ---------------- ----------------- ---------------- ------------
At 31 March 2021 195 - 2,947 - 3,142
----- ----------------- ---------------- ----------------- ---------------- ------------
Amortisation in
period 14 - 195 - 209
----- ----------------- ---------------- ----------------- ---------------- ------------
At 30 September
2021 209 - 3,142 - 3,351
----- ----------------- ---------------- ----------------- ---------------- ------------
Carrying value
----- ----------------- ---------------- ----------------- ---------------- ------------
At 31 March 2020 84 10 369 508 971
----- ----------------- ---------------- ----------------- ---------------- ------------
At 30 September
2020 72 10 350 508 940
----- ----------------- ---------------- ----------------- ---------------- ------------
At 31 March 2021 67 10 233 508 818
----- ----------------- ---------------- ----------------- ---------------- ------------
At 30 September
2021 55 10 271 10,615 10,951
----- ----------------- ---------------- ----------------- ---------------- ------------
9. Related party transactions
The related party transactions that occurred in the six months
ended 30 September 2021 are not materially different in size or
nature to those reported in the Company's Annual Report for the
year ended 31 March 2021.
10. Availability of Interim Report
The Interim Report is being made available to shareholders on
the Company website www.creightonsplc.com. Further copies can be
obtained from the Company's Registered Office, 1210 Lincoln Road,
Peterborough, PE4 6ND.
Interim Dividend Declaration
Creightons plc wishes to confirm that the Company has declared
and will pay an interim dividend of 0.15p per ordinary share as per
the timetable below:
Ex-dividend date Thursday 13 January 2022
Record date Friday 14 January 2022
Payment date Friday 11 February 2022
For more information:
Nicholas O'Shea, Director, Creightons plc 01733 281000
Roland Cornish, Beaumont Cornish Limited 0207 628 3396
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