TIDMLDG
RNS Number : 3943H
Logistics Development Group PLC
06 April 2022
6 April 2022
Logistics Development Group plc
("LDG" or the "Company")
Final Results for year ended 30 November 2021
Logistics Development Group plc, the AIM listed investing
company, announces its audited final results for the year ended 30
November 2021.
Full Year 2021 Results Summary
-- It was an exciting year for the Company, which culminated in
the successful disposal of Marcelos' investment in GreenWhiteStar
Acquisitions Limited ("GWSA") and its subsidiaries Eddie Stobart,
The Pallet Network, iForce, Eddie Stobart Europe and The Logistics
People (together the "Eddie Stobart Businesses") to Culina Group
Limited, one of the UK's leading logistics companies, which is
owned by the German Müller family.
-- The Company had a cash balance of GBP131.9m at the end of the
year, following the disposal of the Company's 49% shareholding in
GWSA and the GBP6.0m PIK Loan note held by the Company which
generated a cash inflow of GBP125.2m.
-- The Company reported strong results for the year ended
November 2021, with an underlying EBIT(1) of GBP84.6m (2020: loss
of GBP11.3m) before exceptional income of GBP0.1m (2020:
exceptional income of GBP3.4m) and a profit before tax of GBP84.7m
(2020: loss before tax of GBP7.9m).
-- The Company now has no financial debt and a cash balance of
GBP131.9m or approximately GBP0.19 per ordinary share.
-- The proceeds from the disposal will be used twofold. Most of
the funds will be deployed in investments identified by our
investment manager, DBAY. As you might be aware, post period end
during a general meeting held on 31 January 2022, shareholders
approved a broadening of the investing policy. This will allow DBAY
to invest in opportunities outside the logistics sector, broadening
the opportunity set available to LDG. On 10 March 2022, the Company
announced its first investment under the new investing policy, as
amended after the General Meeting held on 31 January 2022 (the
"General Meeting"), investing GBP6.3m in Caretech Holdings PLC for
approximately 0.88% of Caretech's issued share capital. On 1 April
2022, the Company announced that it had acquired further shares in
Caretech Holdings Plc for a further consideration of GBP6.8m. As a
result the Company now owns 1.74% of Caretech's issued share
capital.
-- Secondly, since LDG's share price has consistently been
trading at a discount to the Company's cash per share, the Board
decided to initiate a share buyback program to narrow the discount
over time. This has also been approved by shareholders at the
General Meeting and the Company has since commenced the buyback
programme which should allow the Company to narrow the discount to
net asset value at which LDG's ordinary shares currently trade.
(1) Underlying EBIT is an alternative performance measure (see
Note 3) and is defined as profit/loss before interest and tax
adding back exceptional items.
A copy of the full year results are also available to be viewed
on, or downloaded from, the Company's corporate website at
www.ldgplc.com
For enquiries:
Logistics Development Group Via FTI Consulting
plc
FTI Consulting
Nick Hasell
Alex Le May
Cally Billimore +44 (0) 20 3727 1340
Strand Hanson Limited
(Financial and Nominated Adviser)
James Spinney
James Dance
Abigail Wennington +44 (0) 20 7409 3494
Investec Bank plc
(Broker)
Gary Clarence
Harry Hargreaves +44 (0) 20 7597 5970
Letter from Chairman
Dear Shareholders
I am pleased to present the annual report and the audited
financial statements for Logistics Development Group plc ("LDG",
"the Company") for the year ended 30 November 2021.
It was an exciting year for the Company, which culminated in the
successful disposal of Marcelos's investment in GreenWhiteStar
Acquisitions Limited ("GWSA") and its subsidiaries Eddie Stobart,
The Pallet Network, iForce, Eddie Stobart Europe and The Logistics
People (together the "Eddie Stobart Businesses") to Culina Group
Limited, one of the UK's leading logistics companies, which is
owned by the German Müller family.
During the 17 months period under the control of DBAY Advisors
Limited ("DBAY"), our investment manager, GWSA's profitability was
increased from an EBITDA (pre IFRS 16) of GBP4.2m in 2019 to
GBP47.8m by the end of the 2020 financial year, while net financial
debt had been reduced from GBP221.7m to GBP144.5m. On the back of
this outstanding performance, the disposal of our 49% shareholding
in GWSA and the GBP6.0m PIK Loan note held by LDG generated a cash
inflow of GBP125.2m, meaning the Company had a cash balance of
GBP131.9m or approximately GBP0.19 per share at the year end. LDG's
share price was GBP0.06 at the time when DBAY took control of GWSA,
implying a money multiple of approximately 3x over the 17 month
period during which DBAY controlled GWSA and its subsidiaries.
I believe DBAY have found a good home for the Eddie Stobart
Businesses in Culina Group. Culina's management has a deep
understanding of the UK transport and logistics landscape, as well
as the financial resources to allow the Eddie Stobart Businesses to
continue its long-standing successful heritage.
Driven by the disposal of GWSA, your Company reported strong
results for the year ended November 2021, with an underlying
EBIT(1) of GBP84.6m (2020: loss of GBP11.3m) before exceptional
income of GBP0.1m (2020: exceptional income of GBP3.4m) and a
profit before tax of GBP84.7m (2020: loss before tax of
GBP7.9m).
Including income received from additional deferred consideration
from the GWSA disposal, the Company now has no financial debt and a
cash balance of GBP131.9m or approximately GBP0.19 per ordinary
share. These results are discussed in detail in the Business and
Financial Review and in the notes to the financial statements.
The proceeds from the disposal will be used twofold. Most of the
funds will be deployed in investments identified by our investment
manager, DBAY. As you might be aware, post period end during a
general meeting held on 31 January 2022, shareholders approved a
broadening of the investing policy. This will allow DBAY to invest
in opportunities outside the logistics sector, broadening the
opportunity set available to LDG. On 10 March 2022, the Company
announced its first investment under the new investing policy, as
amended after the General Meeting held on 31 January 2022 (the
"General Meeting"), investing GBP6.3m in Caretech Holdings PLC for
approximately 0.88% of Caretech's issued share capital. On 1 April
2022, the Company announced that it had acquired further shares in
Caretech Holdings Plc for a further consideration of GBP6.8m. As a
result the Company now owns 1.74% of Caretech's issued share
capital.
Secondly, since LDG's share price has consistently been trading
at a discount to the Company's cash per share, the Board decided to
initiate a share buyback program to narrow the discount over time.
This has also been approved by shareholders at the General Meeting
and the Company has since commenced the buyback programme which
should allow the Company to narrow the discount to net asset value
at which LDG's ordinary shares currently trade.
Over the last year, we had the opportunity to welcome two new
Directors to the Board of LDG. Peter Nixon is an experienced
chartered accountant and was appointed to the Board from 9 December
2021, replacing Saki Riffner. David Facey, also an experienced
chartered accountant and CFO of AIM-listed companies operating
within the financial sector, was appointed to the Board and as
chair of the Audit Committee from 1 April 2021.
The Company is now in the fortunate position that it has only
made a small acquisition and as such has a clean canvas to work
with and a broader investing policy. I have every confidence that
DBAY as our investment manager will make good use of the funds to
invest in companies which will reward all shareholders. In the 50
years I have been following stock markets I have never encountered
such an extraordinary set of circumstances which the world now
faces. The tragic events in the Ukraine, which are unfolding before
our very eyes need little embellishment from me, excepting that I
would never have thought I would be part of the pre-war generation!
Following on from the well documented dysfunctional damage that the
COVID outbreak has caused to the world, it has been a very grim
start to the 21(st) century, but let us hope that we can move into
sunnier times sometime soon.
Finally, I would like to thank shareholders, old and new, for
their continued support.
Adrian Collins
Chairman
(1) Underlying EBIT is an alternative performance measure (see
Note 3) and is defined as profit/loss before interest and tax
adding back exceptional items.
Business and financial review for the year ended 30 November
2021
Review of the year
Transition to AIM Investing Company, appointment of DBAY as
investment manager, and fund-raising
On 31 December 2020, following a successful fund-raising through
a subscription, placing and open offer generating GBP16.2m (net
GBP14.5m), the Company's shares were re-admitted to trading on AIM,
completing its transition to an AIM-listed Investing Company.
Initially, the investing policy was focused on the logistics sector
and DBAY was appointed as the Company's investment manager.
DBAY is an asset management firm with offices in London and the
Isle of Man. Its core team has been working together for over 20
years and combines a diversified set of skills from financial and
operational backgrounds, with deep insight into a number of
industry sectors. The team worked together on their first
investment vehicle in 2008, and formed DBAY in 2011. Additional
information on DBAY is set out on page 6 of this report.
New investments during the period
Following the fund-raising, in May 2021, LDG, under the guidance
of our investment manager DBAY, invested GBP6.0m to acquire an
indirect 10.9% equity interest in an 18% PIK Loan note with
indirect exposure to the performance of GWSA and its subsidiaries.
This principal plus accrued interest was repaid upon the disposal
of GWSA on 1 July 2021.
Turnaround and disposal of GWSA
On 30 March 2021, GWSA advised LDG of its audited consolidated
results for the year ended 30 November 2020. After a year under the
control of DBAY, GWSA and the Eddie Stobart Businesses had
delivered a strong turnaround, with EBITDA (excluding the impact of
IFRS 16), increasing to GBP47.8m vs. GBP4.2m in the prior year. In
addition, the net financial debt of GWSA reduced by GBP77m to
GBP145m in the period, deleveraging substantially and putting the
Eddie Stobart Businesses back on a sustainable funding
structure.
The turnaround was achieved with DBAY's active operational
involvement and included a significant number of value creation
activities.
GWSA's performance confirms our belief that DBAY was best placed
to transform and turnaround the Eddie Stobart Businesses after a
difficult period, and we expect similarly successful value creation
initiatives in future investments DBAY will enter into on behalf of
LDG.
The sale of GWSA, including Eddie Stobart Businesses, to Culina
Group Limited was announced and completed on 1 July 2021. From the
combination of LDG's 49% indirect interest in GWSA and the PIK Loan
note, the transaction generated a cash inflow of GBP125.2m for LDG,
leaving the Company debt free and with a cash balance of
approximately GBP0.19 per share. The implied money multiple over
the 17 months holding period is approximately 3x compared to the
share price of GBP0.06 in December 2019, the time when LDG sold
it's 51% controlling stake in GWSA and the Eddie Stobart Businesses
to DBAY.
Changes to the Board
Peter Nixon, an experienced chartered accountant, was appointed
to the Board from 9 December 2021, replacing Saki Riffner. David
Facey, also an experienced chartered accountant and CFO of
AIM-listed financial sector companies, was appointed to the Board
and as chair of the Audit Committee from 1 April 2021.
Subsequent events - New investment policy and agreement, share
buyback and cancellation of share premium account
Following the disposal of GWSA, the Board, in conjunction with
DBAY, have reviewed a number of investment opportunities and we
have come to the conclusion that there are more attractive
opportunities to create shareholder value outside of the logistics
focused investing policy adopted in December 2020.
Accordingly, after seeking shareholder approval at the General
Meeting held on 31 January 2022, shareholders have agreed to a new
and wider investing policy. The revised investing policy provides
for investments primarily in undervalued companies. Further details
are set out on page 6 and 7 of the Annual Report and Accounts.
At the same meeting, the Board received approval from
shareholders to implement a share buyback programme. As the
Company's shares have been trading at a significantly discounted
level to the amount of available cash per Ordinary Share, the
Company has obtained shareholder approval to acquire up to 20% of
the issued share capital as at the date of the General Meeting.
This should result in the reduction of the observed discount to net
asset value per Ordinary Share and provide an exit opportunity for
shareholders who do not wish to retain their investment in the
Company. The Company received approval from the High Court of
England and Wales to proceed with a Capital Reduction and create
distributable reserves on 22 February 2022, which will also create
flexibility to make future distributions.
Financial performance
The results for the current year reflect the group structure as
at 30 November 2021. As the Company does not have any majority
owned or controlled subsidiaries at the reporting date, there is no
requirement for consolidation and the audited financial statements
in this report reflect the standalone results of the Company for
the current and comparative periods.
The Company still has an exposure to the intermediate holding
companies which held the GWSA investments, and expects further
potential cash inflows from the final purchase price adjustments
for up to 24 months post closing of the GWSA disposal transaction.
LDG measures these investments at fair value through the profit and
loss account. The election is taken based on the investment being a
'venture capital' investment under IAS 28 'Investments in
Associates and Joint Ventures'.
At the reporting date the fair value ascribed to the investments
is GBP2.2m (2020: GBP35.8m) which reflects the current value at the
reporting date in respect of guaranteed expected future cash flows
(2020: valuation basis reflected the value of the investment in
GWSA based on the market capitalisation of the Company). The
Directors have reviewed this valuation approach and consider it to
be appropriate.
Administrative expenses before exceptional items are
significantly lower in the reporting year at GBP1.1m (2020:
GBP2.2m) as the Company no longer incurs any share-based payment
charges, has lower insurance costs, lower audit fees and general
expenses.
The Company's underlying EBIT(1) in the year was a profit of
GBP84.6m (2020: loss of GBP11.3m) before exceptional income of
GBP0.1m (2020: exceptional income of GBP3.4m) and statutory profit
before tax was GBP84.7m (2020: loss before tax of GBP7.9m). The
exceptional income of GBP0.1m during the year comprised of a refund
of VAT in relation to historic transaction costs relating to the
2019 GWSA disposal. During the prior year, the Company recognised
an exceptional income of GBP3.4m comprising a refund of transaction
costs of GBP2.8m associated with the disposal of GWSA and
2019-related audit fees of GBP0.6m. The costs were ultimately borne
by GWSA.
Net debt
As at the reporting date, the Company has cash and cash
equivalents of GBP131.9m (2020: GBP0.7m) principally resulting from
the disposal of GWSA, with the remainder from an equity fund
raising in December 2020, where the Company successfully raised
GBP16.2m in aggregate (pre fundraise costs of GBP1.5m). The fund
raise enabled the Company to satisfy the requirements for
re-admission to AIM as an Investing Company. Related party
borrowings amounted to GBPNil (2020: GBP1.2m).
Exceptional items
During the year, the Company recognised exceptional income in
relation to a VAT refund of GBP0.1m associated with the disposal of
GWSA.
During the prior year, the Company recognised income in relation
to a refund of transaction costs of GBP2.8m associated with the
disposal of GWSA and 2019-related audit fees of GBP0.6m. These
costs were ultimately borne by GWSA in accordance with the DBAY
transaction arrangements.
Further details of exceptional costs are included in note 5.
Tax
For the years ended 30 November 2021 and 2020, the Company
incurred tax losses. The deferred tax asset of GBP0.3m (2020:
GBP0.2m) was not recognised as the Directors do not consider that
there is sufficient certainty over its recovery. The unrecognised
asset can be carried forward indefinitely.
Dividends
The Company did not pay an interim dividend (2020: GBPNil) and
no final dividend is being recommended (2020: GBPNil).
Earnings per share
Underlying basic and diluted earnings per share are both 12.0p
(2020: underlying basic and diluted loss per share were both 3.0p).
Statutory basic and diluted earnings per share are both 12.1p
(2020: statutory basic and diluted loss per share were both 2.1p).
See note 3 and 9 to the Financial Statements.
Information about the Investment Manager
DBAY is an Isle of Man-based asset management firm with offices
in London and Douglas, Isle of Man. Founded in 2011, DBAY is owned
by its partners and is licensed by the Isle of Man Financial
Services Authority. The firm follows a value investing approach and
invests in listed equities across Europe, as well as in private
equity style control investments. The core DBAY team, which have
worked together for 20 years, have developed a diversified set of
skills from financial and operational backgrounds, with deep
insight into a number of industry sectors. DBAY comprises a team of
12 investment and operating professionals. Capital is managed on
behalf of institutional investors, trusts, foundations, family
offices and pension funds.
DBAY currently has a controlling interest in companies that have
a combined turnover in excess of GBP810 million and employ more
than 7,000 staff. The DBAY team previously worked at Laxey
Partners, a hedge fund, where they managed an investment portfolio,
and at DouglasBay Capital plc, an AIM listed investment company. In
2008, under the DBAY team's management, DouglasBay Capital plc took
private and successfully restructured TDG, the logistics company.
During this period (2006 - 2011), the DBAY team generated returns
including a gross money multiple ("MM") of 2.7x and a gross
internal rate of return ("IRR") of 36%. In 2015, DBAY raised DBAY
Fund II, which is currently performing with a gross MM of 1.9x and
14% gross IRR on a stand-alone basis as at 30 September 2021 (and
an estimated gross MM of 3.2x and 44% gross IRR if the cash returns
to co-investors are included). In 2019, DBAY raised DBAY Fund III,
which is currently valued at a gross MM of 2.0x and 48% gross IRR
on a standalone basis as at 30 September 2021.
Investment Policy and Strategy
The investment objective of the Company is to provide
shareholders with attractive total return achieved through capital
appreciation and, when prudent, shareholder distributions or
dividends. The Directors believe that opportunities exist to create
significant value for shareholders through the acquisition of, and
the implementation of substantial operational improvements in,
businesses in the sectors outlined in the Company's Investing
Policy.
The new investing policy can be found on the website www.ldgplc
.com .
DBAY is tasked with full authority to manage the Company's
assets to deliver the investment strategy set out below in
accordance with its investing policy, reporting to the Board on a
regular basis.
The Investing Policy, approved by shareholders on 31 January
2022, states that the Company will seek to achieve its investment
objectives by making investments within the following
parameters:
-- Characteristics : investment primarily in undervalued
companies, with a focus on companies that generate or have the
potential to generate significant cash flows, where there is a high
degree of revenue visibility and a strong and distinctive market
position;
-- Investment Type : investment in equity and equity related
products, in both quoted and unquoted companies, and in the DBAY
Investment Funds;
-- Sectors : a broader range of sectors, such as business
services including, amongst others, logistics, distribution,
technology services, security and manufacturing, or in funds
managed by DBAY which invest in the aforementioned sectors;
-- Geography : there is no geographical restriction but expected
to be primarily within the United Kingdom or the European
Union;
-- Ownership : will range from a minority position to 100%, non-operating ownership; and
-- Restrictions : a maximum of 50% of the Company's Net Asset
Value ("NAV") at the time the relevant investment is made, using
the latest available management accounts of the Company, can be
invested in DBAY Investment Funds. Investments made outside of the
DBAY Investment Funds will be limited to 10% of NAV per investment
(on the same basis), unless approved by the Board.
In addition, DBAY has agreed that it will fund the Company's
reasonable corporate costs going forward.
Investment Management agreement amendments
The original investment management agreement was approved by
shareholders on 29 December 2020, in order to effect the revised
investment policy several changes were made to the investment
management agreement being:
-- DBAY will not receive management or performance fees from LDG
in respect of funds committed to the DBAY Investment Funds by the
Company. Fees will only be charged by the fund, to ensure there
will be no double charging;
-- DBAY have made a commitment to ensure that any DBAY
Investment Funds in which the Company invests will retain
investment policies that are substantially the same as the new
investing policy of the Company;
-- DBAY has made a commitment that it will provide the Company
with an amount which is equal to the Company's reasonable corporate
expenses in the given year, provided that such amount shall not
exceed the lower of: (i) GBP800,000: or (ii) the management fees in
respect of investments made and/or amounts committed by the Company
which are received by DBAY in the relevant year; and
-- DBAY will ensure that there is at all times a contingency
amount of at least GBP2 million on the Company's balance sheet to
cover any exceptional expenses that may arise in the future.
Annual general meeting
The Company intends to hold its Annual General Meeting on 12 May
2022 in London. Further details will be set out in the Notice of
Meeting to be sent to shareholders in due course and published on
our website www.ldgplc.com.
(1) Underlying EBIT is an alternative performance measure (see
Note 3) and is defined as profit/loss before interest and tax
adding back exceptional items.
Company Statement of Comprehensive Income
for the year ended 30 November 2021
Year ended Year ended
30 November 30 November
2021 2020
Note GBP'000 GBP'000
--------------------------------------------- ----- ------------- -------------
Gain/(loss) on investments measured
at fair value through profit or loss
- net 10 85,665 (9,152)
Administrative expenses: before exceptional
items (1,100) (2,162)
Administrative expenses: exceptional
items 5 90 3,415
--------------------------------------------- ----- ------------- -------------
Total administrative expenses (1,010) 1,253
Profit/(loss) before tax 84,655 (7,899)
--------------------------------------------- ----- ------------- -------------
Income tax charge 7 - -
Profit/(loss) and total comprehensive
income/(expense) for the year 84,655 (7,899)
----- ------------- -------------
Earnings/(loss) per share
Basic 9 12.1p (2.1p)
Diluted 9 12.1p (2.1p)
--------------------------------------------- ----- ------------- -------------
The accompanying notes form part of the financial
statements.
Company Statement of Financial Position
as at 30 November 2021
30 November 30 November
2021 2020
Note GBP'000 GBP'000
------------------------------------------ ----- -------------- --------------
Assets
Non-current assets
Investments at fair value through profit
or loss 10 2,218 35,848
2,218 35,848
------------------------------------------ ----- -------------- --------------
Current assets
Other receivables 11 114 28
Cash and cash equivalents 11 131,902 652
------------------------------------------ ----- -------------- --------------
132,016 680
------------------------------------------ ----- -------------- --------------
Total assets 134,234 36,528
------------------------------------------ ----- -------------- --------------
Current liabilities
Amounts owed to related undertakings 11 - (1,235)
Other payables 11 (290) (2,184)
------------------------------------------ ----- -------------- --------------
(290) (3,419)
------------------------------------------ ----- -------------- --------------
Total liabilities (290) (3,419)
------------------------------------------ ----- -------------- --------------
Net assets 133,944 33,109
------------------------------------------ ----- -------------- --------------
Equity
Called up share capital 12 7,022 3,793
Share premium account 12 157,476 146,002
Own treasury shares 12 (857) (2,611)
Retained earnings 12 (29,697) (114,075)
------------------------------------------ ----- -------------- --------------
Total shareholders' funds 133,944 33,109
------------------------------------------ ----- -------------- --------------
The accompanying notes form part of the financial
statements.
The Company Financial Statements on pages 27 to 44 were approved
by the Board of Directors on 5 April 2022 and were signed on its
behalf by:
Adrian Collins
Director
Company number 08922456
Company Statement of Changes in Equity
for the year ended 30 November 2021
Share
Share Share Merger options Own treasury Retained
capital premium reserve reserves shares earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Balance at 1 December
2019 3,793 146,002 7,950 4,218 (2,700) (117,269) 41,994
------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Loss for the year - - - - - (7,899) (7,899)
Share based payment
charges - - - 491 - - 491
Transfer of shares from
the trust - - - - 89 (89) -
Transfers - - (7,950) (4,709) - 12,659 -
Fund raise costs (note
12) - - - - - (1,477) (1,477)
Balance at 30 November
2020 3,793 146,002 - - (2,611) (114,075) 33,109
------------------------- --------- --------- --------- ---------- ------------- ---------- --------
Profit for the year - - - - - 84,655 84,655
Issue of share capital 3,229 12,951 - - - - 16,180
Transfers - fund raise
costs 2020 (note 12) - (1,477) - - - 1,477 -
Transfers (note 12) - - - - 1,754 (1,754) -
Balance at 30 November
2021 7,022 157,476 - - (857) (29,697) 133,944
------------------------- --------- --------- --------- ---------- ------------- ---------- --------
The accompanying notes form part of the financial
statements.
Company Cash Flow Statement
for the year ended 30 November 2021
Year ended Year ended
30 November 30 November
2021 2020
Note GBP'000 GBP'000
------------------------------------------- ----- ------------- -------------
Cash flows from operating activities
Profit/(loss) for the year 84,655 (7,899)
Adjustments for:
Equity settled share-based payment
expenses 12 - 491
(Gain)/loss on investments measured
at fair value through profit or
loss - net 10 (85,665) 9,152
Changes in:
Increase in Other receivables 11 (86) 53,492
Decrease in Other payables 11 (1,652) (54,838)
Net cash (outflow)/inflow from operating
activities (2,748) 398
------------------------------------------- ----- ------------- -------------
Cash flows from investing activities
Dividends received 10 125,295 -
Purchase of investment 10 (6,000) -
------------------------------------------- ----- ------------- -------------
Net cash inflow/(outflow) from investing
activities 119,295 -
------------------------------------------- ----- ------------- -------------
Cash flows from financing activities
Issuing share capital and share
premium 12 16,180 -
Share issue costs paid 12 (1,477) (108)
Net cash inflow/(outflow) from financing
activities 14,703 (108)
------------------------------------------- ----- ------------- -------------
Net increase in cash and cash equivalents 131,250 290
Cash and cash equivalents at the
start of the financial year 652 362
Cash and cash equivalents at the
end of the financial year 131,902 652
------------------------------------------- ----- ------------- -------------
The accompanying notes form part of the financial
statements.
Notes to the Company Financial Statements
for the year ended 30 November 2021
1. Basis of accounting
Logistics Development Group plc (the "Company") is a public
company limited by shares and incorporated and domiciled in
England, United Kingdom. Its registered address is 4th Floor, 3
More London Riverside, London, SE1 2AQ.
Basis of preparation
The Financial Statements were prepared in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006 ("IFRS").
The Financial Statements are presented in pounds sterling,
rounded to the nearest thousand, unless otherwise stated.
As at 30 November 2021, the Company has no subsidiaries and, as
such, no consolidated financial statements have been presented. The
Financial Statements therefore present Company only information for
the current and comparative periods.
The Financial Statements were prepared under the historical cost
convention, except for financial assets recognised at fair value
through profit or loss, which have been measured at fair value. The
Company is not registered for VAT and therefore all expenses are
recorded inclusive of VAT.
Significant holdings in undertakings other than subsidiary
undertakings
As at 30 November 2021 the Company had a significant holding in
Marcelos Limited ("Marcelos"), incorporated in the Isle of Man.
Marcelos has 100 GBP1 ordinary shares in issue, of which the
Company held 49 shares. Its registered address is First Names
House, Victoria Road, Douglas, Isle of Man IM2 4DF.
Going concern
The Directors have a reasonable expectation that the Company has
sufficient resources to continue in operation for the foreseeable
future, a period of at least 12 months from the date of this
report. The Directors have prepared a cash flow forecast for a
period of 3 years which indicates that available funds
significantly exceed anticipated expenditure. Consequently, the
Directors of the Company continue to adopt the going concern basis
of accounting in preparing the annual financial statements.
2. Significant accounting policies
(a) Investments in associates - associates are all entities over
which the Company has significant influence but not control or
joint control. Investments in associates are initially recognised
at fair value and subsequently measured at fair value through
profit or loss.
(b) Fair value measurement - the fair value measurement of the
Company's investments utilises market observable inputs and data as
far as possible. Inputs used in determining fair value measurements
are categorised into different levels based on how observable the
inputs used in the valuation technique utilised are (the 'fair
value hierarchy'):
- Level 1: Quoted prices in active markets for identical items
(unadjusted);
- Level 2: Observable direct or indirect inputs other than Level
1 inputs;
- Level 3: Unobservable inputs (i.e. not derived from market
data and may include using multiples of trading results or
information from recent transactions).
The classification of an item into the above levels is based on
the lowest level of the inputs used that has a significant effect
on the fair value measurement of the item. Transfers of items
between levels are recognised in the period they occur.
(c) Financial instruments
- Financial assets - other receivables and amounts owed to
related undertakings. Such assets are recognised initially at fair
value plus any directly attributable transaction costs. Subsequent
to initial recognition, such assets are measured at amortised cost
using the effective interest method, less any impairment
losses.
- Cash and cash equivalents - in the Statement of Financial
Position, cash includes cash and cash equivalents excluding bank
overdrafts. No expected credit loss provision is held against cash
and cash equivalents as the expected credit loss is negligible.
- Financial liabilities - other payables and amounts owed to
related undertakings. Such liabilities are initially recognised on
the date that the Company becomes party to contractual provisions
of the instrument. The Company derecognises a financial liability
when its contractual obligations are discharged, cancelled or
expire. Such financial liabilities are recognised initially at fair
value less any directly attributable transaction costs. Subsequent
to initial recognition, these financial liabilities are measured at
amortised cost using the effective interest method.
- Share capital - Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax
effects.
(d) Exceptional items - items that are material in size or
nature and non-recurring are presented as exceptional items in the
Statement of Comprehensive Income. The Directors are of the opinion
that the separate recording of exceptional items provides helpful
information about the Company's underlying business performance.
Events which may give rise to the classification of items as
exceptional include restructuring of business units and the
associated legal and employee costs, costs associated with business
acquisitions, impairments and other significant gains or
losses.
(e) Alternative performance measures (APMs) - APMs, such as
underlying results, are used in the day-to-day management of the
Company, and represent statutory measures adjusted for items which,
in the Directors' view, could influence the understanding of
comparability and performance of the Company year on year. These
items include non-recurring exceptional items and other material
unusual items.
(f) Tax - tax expense comprises current and deferred tax.
Current tax and deferred tax are recognised in profit or loss
except to the extent that it relates to items recognised directly
in equity or in other comprehensive income. Deferred tax assets are
recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary
differences can be utilised.
(g) Operating segments - the Company has a single operating
segment on a continuing basis, namely investment in a portfolio of
assets.
(h) Fund raise costs - transaction costs incurred in
anticipation of an issuance of equity instruments are recorded as a
deduction from the retained earnings reserve in accordance with IAS
32 and the Companies Act 2006.
(i) Own shares reserve - transfer of shares from the trust to
employees is treated as a realised loss and recognised as a
deduction from the retained earnings reserve.
New and amended standards adopted by the Company
There are no IFRS standards or IFRIC interpretations that are
mandatory for the year ended 30 November 2021 that have a material
impact on the financial statements of the Company.
Critical judgements in applying the Company's accounting
policies
In applying the Company's accounting policies, the Directors
have made the following judgements that have the most significant
effect on the amounts recognised in the financial statements (apart
from those involving estimations, which are dealt with below) and
have been identified as being particularly complex or involve
subjective assessments.
(i) Measurement of the investments - during the prior year, the
Company elected to measure its investment in Marcelos, the
intermediate holding company of the GWSA Group, at fair value
through profit and loss. The election is taken on the basis of the
investment being a 'venture capital' investment under IAS 28
'Investments in Associates and Joint Ventures'.
The strategy of the Company as an Investing Company is to
generate value though holding investments for the short to medium
term. Therefore, the Directors believe that the fair value method
of accounting for the investments is in line with the strategy of
the Company.
Had the election not been made, the investment in Marcelos would
have been subject to equity accounting that involves recognition of
the investment at cost and subsequent measurement at cost plus a
share of profits and losses of the GWSA Group, less dividends
received.
(ii) Fair value of the investments - the Directors have recorded
the investment in Marcelos at fair value. The fair value at the
period end was calculated on the basis of the net assets of
Marcelos, and represents the guaranteed expected future cashflows
relevant to the Company. The fair value at the prior period end was
calculated on the basis of the market capitalisation of the
Company, which was considered to be the most suitable valuation
methodology as at 30 November 2020. The Directors reviewed other
valuation metrics such as peer group trading multiples. Based on
these metrics the valuation was justifiable, albeit at the lower
end of the range of possible values. The Directors believed that
this valuation approach represented the price of the Company that
would be received in an orderly transaction between market
participants.
Key sources of estimation in applying the Company's accounting
policies
The Directors believe that there are no key assumptions
concerning the future, and other key sources of estimation
uncertainty at the balance sheet date that have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
3. Alternative performance measures reconciliations
Alternative performance measures (APMs), such as underlying
results, are used in the day-to-day management of the Company, and
represent statutory measures adjusted for items which, in the
Directors' view, could influence the understanding of comparability
and performance of the Company year on year. The reconciliation of
APMs to the reported results is detailed below:
2021 2020
GBP'000 GBP'000
---------------------------------------------- ------------ ------------
Profit/(Loss) before tax 84,655 (7,899)
Exceptional income 90 3,415
Underlying EBIT 84,565 (11,314)
----------------------------------------------- ------------ ------------
2021 2020
(in (in
thousands) thousands)
---------------------------------------------- ------------ ------------
Weighted average number of Ordinary Shares
- Basic 702,206 379,347
----------------------------------------------- ------------ ------------
Weighted average number of Ordinary Shares
- Diluted 702,206 379,347
----------------------------------------------- ------------ ------------
Underlying Basic earnings/(loss) per share
for total operations 12.0p (3.0p)
----------------------------------------------- ------------ ------------
Underlying Diluted earnings/(loss) per share
for total operations 12.0p (3.0p)
----------------------------------------------- ------------ ------------
4. Employees and Directors
Staff costs and the average number of persons (including
Directors) employed by the Company during the year are detailed
below:
2021 2020
GBP'000 GBP'000
------------------------------------------ -------- --------
Staff and Director costs for the Company
during the year
Wages and salaries 250 292
Social security costs 19 26
269 318
------------------------------------------- -------- --------
Average monthly number of employees and
Directors
Employees and Directors 4 4
-------------------------------------------- -------- --------
A summary of Directors' remuneration (key management personnel)
is detailed below:
2021 2020
GBP'000 GBP'000
---------------------------------------- -------- --------
Emoluments, bonus and benefits in kind 194 245
Total Directors' remuneration 194 245
----------------------------------------- -------- --------
Remuneration of the highest paid Director is detailed below:
2021 2020
GBP'000 GBP'000
---------------------------------------- -------- --------
Emoluments, bonus and benefits in kind 93 64
----------------------------------------- -------- --------
5. Exceptional items
During the year, the Company recognised exceptional income in
relation to a VAT refund of GBP90,000 associated with the disposal
of GWSA.
During the prior year, the Company recognised exceptional income
in relation to reimbursed transaction costs of GBP2,845,000
associated with the disposal of GWSA and 2019-related audit fees of
GBP570,000. The costs were incurred by the Company in 2019 and
ultimately borne by GWSA upon completion of the transaction in
accordance with deal arrangements.
6. Audit fees
During the year, the Company obtained the following services
from the Company's auditors, the costs of which (inclusive of VAT
as the Company is not registered for VAT) are detailed below:
2021 2020
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Fees payable for the audit of the Company's annual
financial statements 119 114
Audit-related assurance services - 96
Other assurance services (fund raise expenses) - 554
----------------------------------------------------- -------- --------
Total fees payable to Company's
auditors 119 764
------------------------------------------------------ -------- --------
7. Income tax charge
The Company did not recognise current and deferred income tax
charge or credit (2020: nil). In 2021, the deferred tax asset of
GBP412,050 (2020: GBP219,000) was not recognised as the Directors
do not consider that there is sufficient certainty over its
recovery. The underlying tax losses can be carried forward
indefinitely.
The income tax charge for the year included in the statement of
comprehensive income can be reconciled to loss before tax
multiplied by the standard rate of tax as follows:
2021 2020
GBP'000 GBP'000
--------------------------------------------------- --------- --------
Profit/(loss) before tax 84,655 (7,899)
---------------------------------------------------- --------- --------
Expected tax charge/(credit) based on
a corporation tax rate of 19% (2020: 19%) 16,084 (1,501)
---------------------------------------------------- --------- --------
Effect of expenses not deductible in determining
taxable profit 98 1,282
---------------------------------------------------- --------- --------
Effect of income not taxable in determining
taxable profit (16,276) -
---------------------------------------------------- --------- --------
Unused tax losses for which no deferred
tax asset has been recognised 94 219
---------------------------------------------------- --------- --------
Effect of a change in future corporation tax rate
on the deferred tax asset - -
----------------------------------------------------- --------- --------
Income tax charge - -
----------------------------------------------------- --------- --------
The current effective UK corporation tax rate for the financial
year is 19%. The UK corporation tax rate will remain at 19% until
31 March 2022. On 3 March 2021, it was announced that the main rate
of corporation tax will increase to 25% from 1 April 2023. As a
result, the deferred tax asset has been calculated using the 25%
rate.
8. Dividends
At the date of approving these Financial Statements, no final
dividend has been approved or recommended by the Directors (2020:
GBPNil).
9. Earnings per share
Basic earnings per share amounts are calculated by dividing
profit/(loss) for the period attributable to ordinary equity
holders of the Company by the weighted average number of ordinary
shares outstanding during the 12 months to the period end.
Diluted earnings per share amounts are calculated by dividing
the profit/(loss) attributable to ordinary equity holders of the
Company by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on conversion of all the
potentially dilutive instruments into ordinary shares. The Company
has no dilutive instruments to be included in the calculation.
2021 2020
GBP'000 GBP'000
------------------------------------------------- ------------ ------------
Profit/(loss) attributed to equity shareholders 84,655 (7,899)
-------------------------------------------------- ------------ ------------
2021 2020
(in (in
thousands) thousands)
------------------------------------------------- ------------ ------------
Weighted average number of Ordinary Shares
- Basic 702,206 379,347
-------------------------------------------------- ------------ ------------
Weighted average number of Ordinary Shares
- Diluted 702,206 379,347
-------------------------------------------------- ------------ ------------
Basic earnings/(loss) per share for total
operations 12.1p (2.1p)
Diluted earnings/(loss) per share for
total operations 12.1p (2.1p)
-------------------------------------------------- ------------ ------------
10. Investments at fair value through profit or loss
GreenWhiteStar
Acquisitions Alpha Persei Marcelos
Limited Limited Limited Total investments
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------------- ------------- ---------- ------------------
1 December 2019 45,000 - - 45,000
--------------------------- --------------- ------------- ---------- ------------------
Disposals during the year (45,000) - - (45,000)
Additions during the year - - 45,000 45,000
Change in fair value - - (9,152) (9,152)
--------------------------- --------------- ------------- ---------- ------------------
30 November 2020 - - 35,848 35,848
--------------------------- --------------- ------------- ---------- ------------------
Additions during the year - 6,000 - 6,000
Change in fair value - 287 85,378 85,665
Dividends - (6,287) (119,008) (125,295)
--------------------------- --------------- ------------- ---------- ------------------
30 November 2021 - - 2,218 2,218
--------------------------- --------------- ------------- ---------- ------------------
During the year, the Company acquired for GBP6.0 million a 10.9%
equity interest in Alpha Persei Limited which held an 18% PIK Loan
note with indirect exposure to the performance of GWSA.
During the year, the Company announced the disposal of its
interest in GWSA Group, held through its investments in Marcelos
and Marcelos' wholly owned subsidiary Alpha Cassiopeiae
Limited.
The disposal resulted in the Company receiving a dividend of
GBP6,287,000 from Alpha Persei Limited and a dividend of
GBP119,008,000 from Marcelos. These dividends were considered to be
a return of capital and have been offset against the carrying value
of the investment.
As at 30 November 2021, the Company's investment in Marcelos was
revalued to GBP2,218,000 as a result of a dividend proposed to be
paid to the Company from Marcelos during the next financial
year.
11. Financial assets and liabilities
2021 2020
GBP'000 GBP'000
-------------------------------------- -------- --------
Financial assets at fair value
through the profit or loss
Investments in associate (see
note 10) 2,218 35,848
Financial assets at amortised
cost
Other receivables 114 28
---------------------------------------- -------- --------
Total financial assets 2,332 35,876
---------------------------------------- -------- --------
Financial liabilities at amortised
cost
Amounts owed to related undertakings
(see note 13) - (1,235)
Other payables (290) (2,184)
---------------------------------------- -------- --------
Total financial liabilities (290) (3,419)
---------------------------------------- -------- --------
Cash and cash equivalents 131,902 652
Net funds 131,902 652
---------------------------------------- -------- --------
All financial assets and liabilities mature within one year. The
fair value of those assets and liabilities approximates their book
value.
Other receivables represent prepayments. Other payables include
accruals of GBP216,000 (2020: GBP2,122,000 with GBP1,369,000
relating to the accrued fund raise costs).
The Company's overall risk management programme focuses on
reducing financial risk as far as possible and therefore seeks to
minimise potential adverse effects on the Company's financial
performance. The policies and strategies for managing specific
financial risks are summarised as follows:
Liquidity risk
The Company finances its operations by equity. The Company
undertakes short-term cash forecasting to monitor its expected cash
flows against its cash availability. The Company also undertakes
longer-term cash forecasting to monitor its expected funding
requirements in order to meet its current business plan.
Credit risk
The Company's principal exposure to credit risk is in the
amounts owed by related undertakings. There are no related
undertakings in the current year.
Capital management
Capital comprises share capital of GBP7.0m (2020: GBP3.8m) and
share premium of GBP157.5m (2020: GBP146.0m).
12. Capital and reserves
Called up Share
No of share premium
shares capital account
'000 GBP'000 GBP'000
------------------------------------- -------- ---------- ---------
Ordinary shares of 1p each in issue
at 30 November 2020 379,347 3,793 146,002
------------------------------------- -------- ---------- ---------
Ordinary shares of 1p each in issue
at 30 November 2021 702,206 7,022 157,477
------------------------------------- -------- ---------- ---------
All of the ordinary shares in issue referred to in the table
above were authorised and are fully paid.
During the prior year, costs in relation to the fund raise of
GBP1.5m in December 2020 were deducted from the retained earnings
reserve. During the year, these costs were reclassified from
retained earnings to be offset against share premium.
Own treasury shares
Included in the total number of ordinary shares outstanding
above are 535,440 (2020: 1,634,304) ordinary shares held by the
Company's employee benefit trust. The ordinary shares held by the
trustee of the Company's employee benefit trust pursuant to the SIP
are treated as Own shares in the Company's Balance Sheet in
accordance with IAS 32 . During the year, 1,098,864 (2020: 55,696)
shares were transferred to employees of the GWSA Group.
13. Related party transactions
During the year, the Company settled the amount due to related
party GWSA as at the prior year end, for the value GBP1,235,000.
The Company did not enter into any other related party
transactions.
During the prior year, from the date of the disposal of the
investment in its subsidiary, GWSA, the Company entered into
commercial transactions with GWSA as follows:
Amounts owed to related parties
GBP'000
------------------------------------ --------------------------------
9 December 2019 -
------------------------------------ --------------------------------
Purchases from related parties 385
Reimbursement from related parties 850
------------------------------------- --------------------------------
30 November 2020 1,235
------------------------------------- --------------------------------
14. Capital commitments
At 30 November 2021, the Company had no commitments (2020:
GBPNil).
15. Contingent liabilities
At 30 November 2021, the Company had no contingent liabilities
(2020: GBPNil).
16. Subsequent events
On 14 January 2022, the Company received a dividend from
Marcelos Limited of GBP2,218,000.
Following shareholders' approval by a special resolution on 31
January 2022, the Court approved a reduction of the Company's share
premium on 22 February 2022 of GBP157,477,000 to distributable
reserves. The distributable reserve will allow the Company to
proceed with an on-market purchase of up to 20% of the Company's
issued share capital.
On 10 March 2022, the Company announced that it had acquired
1,000,000 ordinary shares in Caretech Holdings PLC at GBP6.335 per
share, for a total consideration of GBP6.3m. This was its first
investment since becoming an Investing Company and is consistent
with its investing policy as amended after the General Meeting held
on 31 January 2022.
On 1 April 2022, the Company announced that it had acquired a
further 974,130 shares in Caretech Holdings Plc at an average price
of GBP6.95 per share, for a total consideration of
GBP6,769,069.
GLOSSARY
Term Definition
Accounts The financial statements of the Company
Admission The admission of the issued ordinary shares
in the Company admitted to trading on AIM
that became effective on 31 December 2020
AGM Annual general meeting of the Company
AIM Alternative Investment Market of the London
Stock Exchange
AIM Rules T he AIM Rules for Companies published by
the London Stock Exchange from time to time
(including, without limitation, any guidance
notes or statements of practice) which govern
the rules and responsibilities of companies
whose shares are admitted to trading on AIM
AIM Investing Company An Investing Company as defined by the AIM
rules.
APMs Alternative Performance Measures
Board The B oard of Directors of the Company
CAGR Compound annual growth rate
CGU Cash Generating Unit
Company Logistics Development Group plc, a public
limited company incorporated in England and
Wales with registered number 08922456
DBAY DBAY Advisors Limited and/or any fund(s) or
entity(ies) managed or controlled by DBAY
Advisors Limited as appropriate in the relevant
context
DBAY Transaction On 9 December 2019 DouglasBay Capital III
Fund LP, a fund managed by DBAY Advisors Limited
completed the acquisition of an indirect 51%
equity stake in GreenWhiteStar Acquisitions
Limited.
Directors The Directors of the Company as at the date
of this document, as identified on page 10
EBITDA Earnings before interest, tax, depreciation
and amortisation
Eddie Stobart Businesses Eddie Stobart, The Pallet Network, iForce,
Eddie Stobart Europe and The Logistics People
EPS Earnings per share
FY20 Financial Year ended 30 November 2020
FY21 Financial Year ended 30 November 2021
GWSA GreenWhiteStar Acquisitions Limited, the operational
holding company of the Eddie Stobart trading
entities; Eddie Stobart Limited, iForce Limited,
The Pallet Network Limited and The Logistic
People Limited.
GWSA Group GreenWhiteStar Acquisitions Limited and all
of its subsidiaries from time to time
HY20 Six month period ended 31 May 2020
HY21 Six month period ended 31 May 2021
IAS International Accounting Standards
IFRS International Financial Reporting Standards
Investment Management An investment management agreement entered
Agreement into between the Company and DBAY, pursuant
to which DBAY has been appointed as the Company's
investment manager
Investing Policy The Company's investing policy more particularly
set out on pages 6 and 7
LTIP The Long Term Incentive Plan
Marcelos Marcelos Limited, a company incorporated on
the Isle of Man (company no. 016829v), whose
registered office is at First Names House,
Victoria Road, Douglas, Isle of Man, IM2 4DF
Ordinary Shares/Shares Ordinary shares of GBP0.01 each in the capital
of the Company
PIK Loan note Loan of GBP55m used to effect the DBAY transaction,
which carries interest at 18% compounding
quarterly, maturing in November 2025.
PWC PricewaterhouseCoopers LLP - the Company's
auditors
QCA Quoted Companies Alliance
QCA Governance Code QCA Corporate Governance Code for Small and
Mid-Size Quoted Companies published by the
QCA
SIP Share Incentive Plan
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END
FR IAMPTMTAMBLT
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April 06, 2022 02:01 ET (06:01 GMT)
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