REG - Likewise Group PLC - FY23 Audited Final Results
20/05/2024 07:00
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RNS Number : 0053P Likewise Group PLC 20 May 2024
20 May 2024
Likewise Group plc
("Likewise" or the "Group")
Audited Final Results for the year ended 31 December 2023
Business on track for £ 200 million in sales achieving first £1 million
order intake
in a single day
Likewise Group plc (AIM:LIKE), the fast growing UK floor coverings
distributor, is pleased to announce its audited Final Results for the year
ended 31 December 2023 ("FY23").
Financial Highlights
· Group Sales increased 12.9% to £139.5 million (FY22: £123.6
million)
· Underlying EBITDA of £7.9 million (FY22: £6.6 million)
· Following further investment in infrastructure, Underlying Profit
Before Tax of £2.32 million (FY22: £2.56 million)
· Proposed Final Dividend of 0.25 pence per Ordinary Share, an increase
of 25% (FY22: 0.20 pence). (Assuming shareholders approve the total dividend
relating to FY23 will be 0.35 pence per Ordinary Share, being an overall
increase of 75% compared with FY22*)
· Completion of All Deferred Consideration Payments of £4.3 million
post year end
· During April 2024 the Group processed its first £1 million order
intake in a single day
· Group Sales to the end of April 2024 increasing by 8.7% and Sales in
Likewise Branded businesses increasing by 15.3% compared with the prior year
Operational Highlights as at April 2024
· 11 Distribution and Logistics Centres created with total capacity
at c.15 million cubic feet
· 80 Suppliers across key flooring products
· 94 Customer focused Management and Sales Executives
· 139 Delivery trucks providing next day service
· 507 Employees, with a significant majority with long-standing
flooring experience
· 100,000's of point of sale items creating market presence
· Over 5,000 Customers, principally independent flooring retailers
and contractors
Chairman and Chief Executive Statement
Likewise is pleased to announce that total Revenue has increased by 12.9% to
£139.5 million. The Group has continued to invest during 2023 and also into
2024 to further strengthen the Sales Resource and Logistics Infrastructure.
Establishing this overall structure to enable the Group to achieve its medium
term objectives inevitably impacts on short term profitability with Underlying
Profit Before Tax for FY23 being £2.32 million. Whilst the Group will
continue to invest, particularly in Sales Resource, the significant
infrastructure costs are largely complete in this phase of our development.
The Group has again made significant progress in 2023, which has continued
into the first four months of 2024, with Group Sales to the end of April
increasing by 8.7% and Sales in Likewise Branded businesses increasing by
15.3% compared with the prior year. The Group continues to trade in line with
current market expectations.
Logistics Network
The Glasgow Distribution Hub, opened in the Spring of 2023, is now making a
meaningful contribution with regard to Storage, Picking and Cutting into the
Likewise Logistics Network. Furthermore, Likewise Scotland is progressively
increasing market share in both Residential and Commercial Flooring.
Likewise North East, which moved into a new Logistics Centre at the beginning
of 2022 is now very clearly established across all flooring sectors and is
well placed to progress its geographical presence.
Likewise North, based in Leeds, is particularly active throughout the M62
Corridor and with enhanced service to North West England through the new
Manchester Logistics Centre. Further investment in sales resource and Point of
Sale will continue to increase their market share in Residential and
Commercial Flooring.
A&A will move into their new Logistics Centre in June. A&A has made an
important contribution to the Group since being acquired in February 2020 and
the new facility will allow A&A to make its next progression in both
Residential and now Commercial Flooring.
Based in Birmingham, the Likewise Midlands business has made tremendous
progress over the last two years and is now very much established as a
principal distributor of Residential and Commercial Flooring throughout the
Midlands.
Likewise South is progressively taking market share of Residential Flooring in
the South of England and will benefit from the expansion of the Floors by
Lewis Abbott Premium Branded Carpet.
Likewise London moved into a new Logistics Centre in Sidcup during January
2023 providing a much improved geographical reach and enhanced transportation
network. To further develop Likewise London, investment has been made in 2024
to strengthen the Management and Sales Team.
Similarly from its Distribution Centre in Sudbury, Likewise South East
invested further in its Management and Sales Team. This allows both businesses
to significantly increase their presence in the important London and South
East Flooring markets and also particularly benefiting from the Floors by
Lewis Abbott product range.
Likewise Wales became operational in January 2024 from the Newport
Distribution Centre and with the support of the Likewise Network has every
opportunity to build a meaningful business in both Residential and Commercial
Flooring.
Valley Wholesale Carpets ("Valley") is a very important part of the Group. The
profitability and positive cash flow of Valley has been particularly strong in
the last two years. Valley has extended its geographical reach over the last
year and there are further opportunities to expand from its key Distribution
Centres in Erith, Derby and Newport. Furthermore, Valley will increase its
product portfolio and develop additional point of sale displays to provide an
enlarged offering to their customers, enabling Valley to have an exciting
future whilst remaining autonomous in the Group structure.
The H&V Carpets, Delta Carpets, Likewise Rugs and Matting and Floors by
Lewis Abbott Premium Brand have every opportunity to further establish
themselves in their respective products segments to be an increasing part of
the Group's activities.
Dividend
Whilst the Group will continue to invest, the significant initial phase is now
largely complete and therefore the Board is confident in expanding on the
progressive policy previously announced by proposing a Final Dividend payment
of 0.25 pence per ordinary share (FY22: 0.20 pence per ordinary share).
This makes the total dividend paid in the year of 0.35 pence per ordinary
share (2022: 0.20* pence per ordinary share). This is a 75% increase on the
FY22 Total Dividend, an encouraging reflection of the financial performance in
2023. The final dividend, if approved by shareholders at the AGM, will be paid
on 5 July 2024 to shareholders on the register at the close of business on 31
May 2024, the ex-dividend date being 30 May 2024.
Shareholders can also take advantage of the Dividend Reinvestment Plan
("DRIP") by registering their intentions with the Company's registrar by 14
June 2024.
Outlook
Developing the Group's market presence is fundamental to achieving its
aspirations with the 94 Sales Management and Sales Executives absolutely
focused on their daily visits to independent flooring retailers and
contractors to maximise the various Brands and in store displays.
To support these numerous sales initiatives, the Logistics Network is now very
well established in both the Likewise Floors and Valley Operations with
capacity created to extend the Group through its medium term objectives.
The quality of the infrastructure developed over the last three years was
clearly demonstrated in early April when the Group was able to process a
record order intake of over £1 million of Sales in a single day.
With a continued focus on investment in Sales Resource and Point of Sale
combined with the additional capacity in the Logistics Infrastructure, the
Board is confident of achieving its ambitions in the coming years.
Notwithstanding some cost inflation, Sales progression in the near future will
be delivered at a lower than historic percentage cost resulting in Operational
Gearing and the Return on Sales meeting the aspirations of the Group.
The quality of the Management and Sales Teams created by the Group over the
last three years is particularly impressive and in our opinion, the strongest
in the UK Flooring Industry, providing the foundations for the Likewise Group
to reach and then surpass its medium term intentions.
Tony Brewer, Chief Executive of Likewise Group plc, said:
"The Group has made significant progress in the last three years. The Board
thanks the Management, Sales Teams and all Staff for their tremendous
contribution to developing the Group and what has been achieved in such a
short time.
Despite challenging market conditions, 2024 has started positively and we have
every confidence of a successful year and most importantly another major step
towards our medium term objectives.
The Group would also like to thank all our Suppliers, Customers and
Shareholders for their support over the last few years and look forward to
further strengthen those relationships to our mutual benefit."
*The 2022 interim dividend of 0.20 pence per ordinary share was the maiden
dividend paid by the Group on 8 July 2022. Whilst this was paid as an interim
dividend in 2022, it was in reflection of the Group's performance in the year
ending 31 December 2021 for which no final dividend was declared. The Capital
Reduction at the beginning of 2022 enabled a payment of a maiden dividend in
respect of the Group's performance in 2021. Therefore, the total dividend for
2023 of 0.35 pence per ordinary share represents a 75% increase on the total
dividend paid in respect of the performance of the Group in FY22 of 0.20 pence
per ordinary share.
For further information, please contact:
Likewise Group plc Tel: +44 (0) 121 817 2900
Tony Brewer, Chief Executive
Zeus (Nominated Adviser and Joint Broker) Tel: +44 (0) 20 3829 5000
Jordan Warburton / David Foreman / James Edis (Investment Banking)
Dominic King (Corporate Broking)
WH Ireland (Joint Broker) Tel: +44 (0) 20 7220 1666
Hugh Morgan / Antonio Bossi (Corporate Finance)
Fraser Marshall / Harry Ansell (Corporate Broking)
Ravenscroft (Joint Broker) Tel: +44 (0) 1481 732 746
Semelia Hamon (Corporate Finance)
Novella Communications (Financial PR) Tel: +44 (0) 20 3151 7008
Claire de Groot / Tim Robertson
CAUTIONARY STATEMENT
Certain statements included or incorporated by reference within this
announcement may constitute "forward-looking statements" in respect of the
Group's operations, performance, prospects and/or financial condition.
Forward-looking statements are sometimes, but not always, identified by their
use of a date in the future or such words and words of similar meaning as
"anticipates", "aims", "due", "could", "may", "will", "should", "expects",
"believes", "intends", "plans", "potential", "targets", "goal" or "estimates".
By their nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may differ
materially from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be met and
reliance should not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. No responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a profit
forecast. This announcement does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to purchase any shares or
other securities in the Group, nor shall it or any part of it or the fact of
its distribution form the basis of, or be relied on in connection with, any
contract or commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other securities of the
Group. Past performance cannot be relied upon as a guide to future performance
and persons needing advice should consult an independent financial adviser.
Statements in this announcement reflect the knowledge and information
available at the time of its preparation.
STRATEGIC REPORT
Business overview
Likewise Group plc is a wholesale distributor of floorcoverings, rugs and
matting products and strives to become one of the UK's largest distributors in
this sector. Leveraging the many years' experience and knowledge of the Board
and the collective Management Team, the Group have rapidly developed a
significant distribution network with 11 operational sites delivering to
customers across the UK. This has been achieved through accretive acquisitions
and more notably through the establishment of new sites, leveraging the brand
and network to create meaningful businesses within their respective
territories. The Board consider the logistics capabilities created can support
the Group's medium‑term aspirations achieving revenues in excess of £200m.
The Group's Distribution Hubs in Glasgow, Leeds, Birmingham and Sudbury, plus
Distribution Centres in Manchester, Newcastle, Newbury and Sidcup in addition
to the Valley Network in Erith, Derby and Newport totaling 15 million cubic
feet, will allow the Group to meet its medium‑term objectives.
The Group will continue to make further investment in organic growth through
sales and marketing initiatives and development in specific geographic
locations. Whilst the Group sees incremental value in leveraging the Group's
brand, acquisition opportunities will be considered in the future if they are
earnings enhancing and provide the appropriate strategic rationale.
Trading performance
The directors are pleased to report the Group's revenue increased from
£123.6m in 2022 to £139.5m for the year ended December 2023.
Likewise London, and Floors by Lewis Abbott moved into its newly refurbished
Logistics Centre at the beginning of 2023 providing improved geographical
reach, enhanced logistics capability and a better working environment for the
local team. Further investment has been made in 2024 to further strengthen the
Management and Sales Team.
Likewise South in Newbury established in April 2022 is progressively taking
market share of residential flooring in the South of England and is
benefitting from the development of the Floors by Lewis Abbott premium branded
ranges.
Likewise Midlands has made tremendous progress over the past two years, and is
now a principal distributor of both residential and commercial flooring
throughout the midlands. In addition, with further investment in cutting
capacity, the facility has strengthened the wider logistics network of benefit
to both the Northern and Southern businesses maximising the Group's ability to
provide a next day service of key benefit to customers.
In line with the strategic plan for A&A, the business appointed its first
contract sales representative in Q4 2023, providing opportunity to expand its
offering in 2024. The business is set to relocate to its new Logistics Centre
in June 2024, enhancing the wellbeing of employees and enabling the facility
to leverage the wider Likewise network to provide opportunities for growth.
The new Glasgow Distribution Hub, opened in Spring 2023 and now makes a
meaningful contribution to the wider Group creating additional storage,
picking and cutting capacity into the Likewise logistics network whilst also
supporting the growth of the Likewise Scotland business established in 2019.
Further investment has been made in establishing a new Likewise Wales facility
which became operational at the beginning of 2024, with the business
benefitting from operating from the shared Valley site in Newport. With the
investment in key personnel, and the support of the wider Likewise network,
2024 should provide many opportunities to considerably develop the business.
Likewise North East has developed a significant trade counter business
benefitting from the wider support of both the Leeds and Scotland Distribution
Hubs to allow it to continue to develop its geographical presence in the
region.
Likewise North, operating from the Leeds Distribution Hub continues to be
particularly active in the M62 corridor and now benefits from the distribution
abilities of A&A in the Northwest, gaining more effective distribution
routes for customers, whilst realising synergies for the Group.
Further investment in the Likewise South East Sales and Management Team
continues to allow the business to expand its geographical reach with similar
investments in London, positioning the Group as a major distributor in key
London and South East markets.
Development of the Group's market presence is fundamental in delivering the
medium‑term objectives of the Group and with input from the Sales Team,
further development of in‑store displays and Point‑of‑Sale initiatives
are critical in realising gains in market share.
Valley Wholesale Carpets (Valley) continues to be a key member of the Group,
providing strong profitability and positive cash flows over the past two years
since acquisition. Further investment has been made to Sales Teams to expand
the business' Geographical reach, as well as investment in its previously
unutilised Newport facility to bring this into operation to benefit customers
in the South West and South Wales regions. Management are also increasing the
current product range and developing new in‑store displays which will be of
significant benefit to customers. This enables Valley to have an exciting
future whilst remaining autonomous in the Group structure.
With a continued focus on investment in the development of the Group's market
presence and Sales Resource, combined with the additional capacity forged in
the Group's extensive distribution network, the Board is confident in
achieving its medium‑term objectives in the coming years. Notwithstanding
some cost inflation, the Board acknowledges with the significant establishment
investment now made, the future development of the Group will result in
improvements to operational gearing with return on sales meeting the
aspirations of the Group.
Business strategy
It is the belief of the Board that value can be generated for suppliers,
customers and shareholders by creating a national supplier and distributor of
floorcoverings in the UK.
The investments made over the past few years in scaling the business have
created a recognised trade brand within the sector. The leveraging of the
Group's brand and logistics network have underpinned the success of many
start‑up sites across the UK, and whilst acquisitions have provided
opportunities to rapidly grow, the organic growth of the business is key to
the long‑term strategy of the Group. Whilst acquisitions will always be
considered where the Board believe they offer value for shareholders, and
accretive growth to the Group, the ability to leverage the Group's brand and
network will be key to achieving the medium‑term objectives.
Whilst there will be a level of investment required to continue the
development of the Group's Sales initiatives, the significant investment in
establishing the network needed to deliver the Group's medium‑term
objectives has been made and as such there are now significant opportunities
to improve operational gearing and thus increase return on sales in line with
the aspirations of the Group.
Market and competition
The floorcovering market is made up of manufacturers, distributors, retailers
and installers. It is the strategy of the Group to become a national
distributor in the market. The UK flooring market is worth c. £2 billion
split between residential, commercial, public and industrial markets. It is
the strategy of the Group to focus on the residential and commercial areas of
the market.
Key performance indicators
The Board consider the following as financial key performance indicators
(KPIs) for the Group: revenue, adjusted profit before tax and operating cash
flow. The Board members review these for each of the businesses on a monthly
basis. Individual subsidiaries have additional key performance indicators
specific to their operations. Sales and margin are also monitored against
budget on a daily basis by the executive management team. Key performance
indicators were as follows:
Currency: £m Year ended Year ended Increase
31 December 2023 31 December 2022 %
£ £
Revenue 139.5 123.6 12.9%
Adjusted profit before tax 2.3 2.6 (9.0%)
Operating cash flow 6.1 (1.3) 556.5%
The above adjusted profit before tax figure is stated after adding back:
Currency: £m Year ended Year ended
31 December 2023 31 December 2022
£ £
Acquisition fees & related costs ‑ 2.3
Loss from new operations* 0.1 0.5
Exceptional investment in point of sale 0.3 0.5
Amortisation of intangibles 0.4 0.4
Share based payments 0.3 0.3
Strategic relocation and establishment costs 1.2 ‑
*Losses from new operations relate to costs incurred in the initial start‑up
phase whilst the business is in its initial development phase and therefore
not generating significant returns.
Exceptional investment in point of sale relate to accelerated expenses
incurred in increasing the Group's market presence from providing heavily
discounted in‑store displays to retailers in order to accelerate the growth
in market share. This amount relates to specific strategic stand placements
over and above what is incurred in the ordinary course of business recognised
in the Consolidated Statement of Profit or Loss.
Strategic relocation and establishment costs relate to costs incurred in the
relocation and establishment of the new 47,000 sq. ft. high bay Distribution
Hub in Glasgow for Likewise Scotland, the relocation and establishment of the
Likewise London business to new facilities in Sidcup, the commencement of
costs incurred in the forthcoming closure of the A&A Manchester facility
as this looks forward to moving to brand new facilities in June 2024 and
closure costs incurred for H&V's small warehouse facility in Muelebeke,
Belgium.
The Board additionally monitors the square footage of available warehouse
space as a non financial KPI. The warehouse capacity as at 31 December 2023
was 499,250 square feet (2022 ‑ 519,000 square feet). This has slightly
reduced since 2022 following the closure of the underutilised H&V
Muelebeke site.
The following tables show a reconciliation of the adjusted results.
Currency: £m 2023 2022*
Underlying Non-underlying** Total Underlying Non-underlying** Total
Revenue 139.5 - 139.5 123.6 - 123.6
Cost of sales (97.3) (97.3) (86.3) - (86.3)
Gross profit 42.2 42.2 37.3 - 37.3
Other operating income - - - - - -
Admin costs (20.6) (1.9) (22.5) (16.8) (3.1) (19.9)
Distribution costs (17.8) (0.2) (18.0) (17.0) - (17.0)
Impairment loses on trade receivables (0.3) - (0.3) (0.2) - (0.2)
Profit/(loss) from operations 3.5 (2.0) 1.5 3.4 (3.1) 0.2
Finance income 0.1 - 0.1 0.0 - 0.0
Finance costs (1.3) (0.2) (1.5) (0.8) - (0.8)
Gain/(Loss) on revaluation - 0.1 0.1 - (0.8) (0.8)
Profit/(loss) before tax 2.3 (2.1) 0.2 2.6 (3.9) (1.4)
Taxation 0.7 - 0.7 0.6 - 0.6
Profit/(loss) for the year 3.1 (3.9) 0.8 3.1 (3.9) (0.8)
* As restated to align treatment with that of the year-end financial
statements.
**Non‐underlying values are exceptional items, which include share based
payment transactions, acquisition costs, amortisation of acquisition
intangibles and strategic project costs. Adjusted results are non‐GAAP
metrics used by management and are not an IFRS disclosure. Details of these
charges can be seen in note 7 in the accounts below.
Financial Results and Ordinary Dividend
The results of the Group are shown in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income.
An interim dividend of 0.10p per ordinary share was paid on 17 November 2023
to shareholders on the register as at 13 October 2023.
A final dividend, in relation to the year ended 31 December 2022, of 0.20p per
share was paid on 7th July 2023 to shareholders on the register at the close
of business on 2nd June 2023, the ex‑dividend date being 1st June 2023.
The directors propose to pay a final dividend of 0.25p per ordinary share in
respect of the financial year ended 31 December 2023. This to be subject to
shareholder approval at the forthcoming AGM.
If approved, the total dividend payable for 2023 will be 0.35p per ordinary
share.
The final dividend, if approved by shareholders at the AGM will be paid on 5
July 2024 to shareholders on the register at the close of business on 31 May
2024, the ex‑dividend date being 30 May 2024.
The last day for investors to elect for the Dividend Re‑Investment Plan
(DRIP) will be 14 June 2024.
Consolidated statement of profit and loss and other comprehensive income for
the year ended 31 December 2023
As restated
2023 2022
Note £ £
6 139,538,014 123,642,673
Revenue
(97,306,471) (86,309,299)
Cost of sales
Gross profit 42,231,543 37,333,374
(22,481,980) (19,914,378)
Administrative expenses
(17,989,409) (16,956,934)
Distribution expenses
(266,087) (238,201)
Impairment losses on trade receivables
Profit from operations 1,494,067 223,861
10 52,330 5,043
Finance income
10 (1,487,716) (796,843)
Finance expense
129,750 (846,380)
Gain/(loss) on revaluation of consideration on acquisition
Profit/(loss) before tax 188,431 (1,414,319)
11 655,594 578,015
Taxation
Profit/(loss) for the year 844,025 (836,304)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
14 24,389 309,957
Revaluation of land and buildings
33 - (5,000)
Actuarial loss on defined benefit schemes
11 (6,097) -
Tax relating to revaluation of land and buildings
18,292 304,957
Items that will or may be reclassified to profit or loss:
(7,015) 16,138
Exchange (losses)/gains arising on translation on foreign operations
Total comprehensive income 855,302 (515,209)
The total basic profit per share attributable to the ordinary equity holders
of the Company was 0.3p (2022 ‑ loss of 0.3p). The total diluted profit per
share attributable to the ordinary equity holders of the Company was 0.3p
(2022 ‑ loss of 0.3p).
The restatement of the 2022 comparative figures has no impact to the loss
reported for the year ended 31 December 2022. Please see note two for further
information.
Consolidated statement of financial position as at 31 December 2023
2023 2022
Note £ £
Assets
Non‑current assets
14 48,385,689 47,300,221
Property, plant and equipment
15 3,938,497 4,208,884
Other intangible assets
16 5,624,284 5,624,284
Goodwill
57,948,470 57,133,389
Current assets
18 20,253,799 18,388,527
Inventories
19 17,679,986 15,573,303
Trade and other receivables
20 5,709,229 5,913,155
Cash and cash equivalents
43,643,014 39,874,985
Total assets 101,591,484 97,008,374
Liabilities
Non‑current liabilities
21 - 4,380,365
Trade and other liabilities
22 20,743,819 20,222,050
Loans and borrowings
11 1,866,950 2,496,677
Deferred tax liability
22,610,769 27,099,092
Current liabilities
21 29,765,971 22,970,426
Trade and other liabilities
22 9,647,060 7,777,512
Loans and borrowings
25 45,103 50,075
Provisions
39,458,134 30,798,013
Total liabilities 62,068,903 57,897,105
Net assets 39,522,581 39,111,269
28 2,439,645 2,438,360
Share capital
29 17,396,190 17,384,625
Share premium
34 903,295 628,454
Share option reserve
2,626,976 2,662,384
Revaluation reserve
(47,502) (40,487)
Foreign exchange reserve
128,170 128,170
Warrant reserve
16,075,807 15,909,763
Retained earnings
Total equity 39,522,581 39,111,269
Consolidated statement of changes in equity for the year ended 31 December
2023
Share capital Share premium Share option reserve Revaluation reserve Foreign exchange reserve Warrant reserve Retained earnings Total attributable to equity holders of parent Total equity
£ £ £ £ £ £ £ £ £
2,438,360 17,384,625 628,454 2,662,384 (40,487) 128,170 15,909,763 39,111,269 39,111,269
At 1 January 2023
- - - - - - 844,025 844,025 844,025
Profit for the year
- - - (35,408) (7,015) - 53,700 11,277 11,277
Other comprehensive income (see note 32)
- - - (35,408) (7,015) - 897,725 855,302 855,302
Total comprehensive income for the year
- - - - - - (731,681) (731,681) (731,681)
Dividends
1,285 11,565 - - - - - 12,850 12,850
Shares options exercised
- - 274,841 - - - - 274,841 274,841
Share options and warrants issued
1,285 11,565 274,841 - - - (731,681) (443,990) (443,990)
Total contributions by and distributions to owners
At 31 December 2023 2,439,645 17,396,190 903,295 2,626,976 (47,502) 128,170 16,075,807 39,522,581 39,522,581
Consolidated statement of changes in equity for the year ended 31 December
2022
Share capital Share premium Share option reserve Revaluation reserve Foreign exchange reserve Warrant reserve Retained earnings Total attributable to equity holders of parent Total equity
£ £ £ £ £ £ £ £ £
1,923,742 22,458,816 308,776 2,406,127 (56,625) 128,170 (4,815,043) 22,353,963 22,353,963
At 1 January 2022
- - - - - - (836,304) (836,304) (836,304)
Loss for the year
- - - 256,257 16,138 - 48,700 321,095 321,095
Other comprehensive income (see note 32)
- - - 256,257 16,138 - (787,604) (515,209) (515,209)
Total comprehensive income for the year
- - - - - - (487,590) (487,590) (487,590)
Dividends
512,143 17,425,358 - - - - - 17,937,501 17,937,501
Issue of share capital
2,475 22,550 - - - - - 25,025 25,025
Share options exercised
- - - - - - 22,000,000 22,000,000 22,000,000
Transfer to retained earnings
- (22,000,000) - - - - - (22,000,000) (22,000,000)
Reduction in share premium
- (522,099) - - - - - (522,099) (522,099)
Share issue costs
- - 319,678 - - - - 319,678 319,678
Share options
514,618 (5,074,191) 319,678 - - - 21,512,410 17,272,515 17,272,515
Total contributions by and distributions to owners
2,438,360 17,384,625 628,454 2,662,384 (40,487) 128,170 15,909,763 39,111,269 39,111,269
At 31 December 2022
Consolidated statement of cash flows for the year ended 31 December 2023
2023 2022
£ £
Cash flows from operating activities
844,025 (836,304)
Profit/(loss) for the year
Adjustments for
14/15 4,924,947 3,633,356
Depreciation and amortisation
(129,750) 846,380
Revaluation of consideration
11 (655,594) (578,015)
Taxation
10 (52,330) (5,043)
Finance income
10 1,487,716 796,843
Finance costs
(107,072) -
Amendments to property, plant and equipment
(110,898) (35,193)
Gain on sale of property, plant and equipment
33 - (5,000)
Defined benefit pension contributions
25 (4,972) (152,601)
Decrease in provisions
34 274,841 319,678
Share options issued
(7,015) 15,429
Net foreign exchange (gain)/loss
6,463,898 3,999,530
Movements in working capital:
(2,106,683) (3,624,487)
Increase in trade and other receivables
(1,865,272) (4,437,276)
Increase in inventories
3,544,930 3,249,449
Increase in trade and other payables
Cash generated from operations 6,036,873 (812,784)
19,770 (514,040)
Corporation taxes received/(paid)
Net cash from/(used in) operating activities 6,056,643 (1,326,824)
Cash flows from investing activities
- (13,541,050)
Acquisition of subsidiary, net of cash acquired
(1,895,323) (2,001,322)
Purchases of property, plant and equipment
206,965 76,424
Proceeds from disposal of property, plant and equipment
15 (133,983) -
Purchase of intangibles
(1,000,000) -
Deferred consideration paid
10 52,330 5,043
Interest received
(2,770,011)
Net cash used in investing activities (15,460,905)
Cash flows from financing activities
10 (449,168) (225,834)
Interest paid
12,850 16,025,026
Consideration for new shares
- (522,099)
Costs of share issue
(3,886,917) (2,448,536)
Repayment of lease liabilities
766,116 2,029,473
Increase in invoice discounting
(1,696,758) (117,106)
Repayment of loans
2,495,000 -
New bank loans
13 (731,681) (487,590)
Dividends paid to the holders of the parent
Net cash (used in)/from financing activities (3,490,558) 14,253,334
Net decrease in cash and cash equivalents (203,926) (2,534,395)
5,913,155 8,447,550
Cash and cash equivalents at the beginning of year
Cash and cash equivalents at the end of the year 5,709,229 5,913,155
Cash and cash equivalents at 31 December 2023 of £5,709,229 (2022 ‑
£5,913,155) comprised of cash and cash equivalents of £5,709,229 (2022 ‑
£5,913,155) less bank overdrafts of £Nil (2022 ‑ £Nil).
Notes to the consolidated financial statements for the year ended 31 December
2023
1. General information
The Company is a public company limited by shares, registered in England and
Wales and listed on the Alternative Investment Market (AIM). The registered
company number is 08010067 and the address of the registered office is Unit 4
Radial Park, Radial Way, Birmingham Business Park, Solihull, England, B37 7WN.
The principal activity of the Group is the wholesale distribution of
floorcoverings and associated products.
2. Restatement of prior period
Management have restated the prior period comparatives within the subsidiary
companies Valley Wholesale Carpets Limited and Likewise Floors Limited to
ensure that classification of cost of sales, distribution expenses and
administrative expenses are in line with the classifications of Likewise Group
Plc.
The impact of this has been to:
‑ decrease cost of sales by £863,145 from £87,172,444 to £86,309,299
‑ increase administrative expenses by £944,768 from £18,969,610 to
£19,914,378
‑ decrease distribution expenses by £81,623 from £17,038,557 to
£16,956,934
There have been no amendments to the prior period Statement of Financial
Position as a result of these reclassifications.
3. Basis of preparation
These financial statements consolidate those of the Company and its
subsidiaries (together referred to as the "Group"). The Parent Company
financial statements present information about the Company as a separate
entity.
The financial information is presented in pounds sterling, which is the
functional currency of the entity and rounded to the nearest £. The financial
statements are prepared on the historical cost basis unless otherwise
specified within these accounting policies.
Both the Company and consolidated financial statements have been prepared and
approved by the directors in accordance with UK adopted International
Accounting Standards. On publishing the Company financial statements here
together with the consolidated financial statements, the Company is taking
advantage of the exemption in s408 of the Companies Act 2006 not to present
its individual income statement and statement of comprehensive income and
related notes.
The accounting policies set out below have been applied consistently to all
periods presented in these financial statements.
4. Accounting policies
4.1 Going concern
The consolidated financial statements for the Group have been prepared on a
going concern basis.
The Group continues to utilise invoice financing arrangements in some
subsidiaries and has the option to draw on additional authorised facilities to
support working capital requirements. The Group has operated within these
facilities throughout the year and continues to do so in 2024. The directors
are confident that the Group will be able to operate within the finance
facilities available to us.
The Board have also undertaken assessments of going concern by building a cash
flow model through to December 2025, based on 2023 actuals, 2024 budget and
forecast performance for 2025. These cashflows indicate that the business has
adequate resources to continue to operate for the foreseeable future and
within the current financing arrangements in place.
Overall, given the strength of the Group's balance sheet, significant cash
reserves on hand, availability of financing arrangements and the strong
forecast performance of the Group, this provides the directors with sufficient
assurance on the Group's ability to continue as a going concern, and therefore
adopt the going concern basis of accounting in preparing the financial
statements.
4.2 Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power to govern the financial and operating policies of an
investee so as to obtain benefits from its activities, has exposure, or
rights, to variable returns and can use its power to affect those returns. In
assessing control, potential voting rights that are currently exercisable are
taken into account. The financial statements of subsidiaries are included in
the consolidated financial statements from the date that control commences
until the date that control ceases.
4.3 Impact of new international reporting standards
There were a number of narrow scope amendments to existing standards which
were effective from 1 January 2023. None of these had an impact on the Group.
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2023 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the Group in the current or future reporting periods and on
foreseeable future transactions.
4.4 Revenue
Revenue comprises sales of goods to customers outside the Group, less an
appropriate deduction for discounts, and is stated at the fair value of the
consideration net of value added tax and other sales taxes.
Revenue and receivables are recognised when performance obligations are
satisfied and the goods are delivered to customers as this is the point in
time that the consideration is unconditional, control of goods has passed and
only the passage of time is required before the payment is due.
4.5 Finance income and costs
Interest income and expense is recognised using the effective interest method
which calculates the amortised cost of a financial asset or liability and
allocates the interest income or expense over the relevant period.
4.6 Property, plant and equipment
Property, plant and equipment under the cost model are stated at historical
cost less depreciation less any recognised impairment losses. Cost includes
expenditure that is directly attributable to the acquisition or construction
of these items. Subsequent costs are included in the asset's carrying amount
only when it is probable that future economic benefits associated with the
item will flow to the company and the costs can be measured reliably. All
other costs, including repairs and maintenance costs, are charged to the
Income Statement in the period in which they are incurred.
Depreciation is provided on all property, plant and equipment and is
calculated as follows:
Freehold property ‑ 2% straight line
Leasehold improvements ‑ straight line over the term of the lease
Plant and machinery ‑ 10% ‑ 33% straight line
Motor vehicles ‑ 20% ‑ 50% straight line
Fixtures, fittings and computer equipment ‑ 10% ‑ 33% straight line
Depreciation is provided on cost less residual value. The residual value,
depreciation methods and useful lives are annually reassessed.
Each asset's estimated useful life has been assessed with regard to its own
physical life limitations and to possible future variations in those
assessments. Estimates of remaining useful lives are made on a regular basis
for all machinery and equipment, with annual reassessments for major items.
Changes in estimates are accounted for prospectively.
The gain or loss arising on disposal or scrapping of an asset is determined as
the difference between the sales proceeds, net of selling costs, and the
carrying amount of the asset and is recognised in the Income Statement.
4.7 Revaluation of property
Individual properties are carried at current year value at fair value at the
date of revaluation less any subsequent accumulated depreciation and
subsequent accumulated impairment losses. Revaluations are undertaken with
sufficient regularity to ensure the carrying amount does not differ materially
from that which would be determined using fair value at the Consolidated
Statement of Financial Position date.
Fair values are determined from market based evidence normally undertaken by
professionally qualified valuers.
Revaluation gains and losses are recognised in Other Comprehensive Income
unless losses exceed the previously recognised gains or reflect a clear
consumption of economic benefits, in which case the excess losses are
recognised in the Income Statement.
The difference between depreciation based on the revalued carrying amount of
the asset and depreciation based on the asset's original cost is transferred
from revaluation reserve to retained earnings at the end of each reporting
period. Any remaining revaluation surplus included in equity is transferred
directly to retained earnings when the asset is disposed of.
4.8 Impairment of non‑financial assets (excluding Goodwill)
At each reporting date, the directors review the carrying amounts of the
Group's non current assets, to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss, if any. Where the asset does not generate cash
flows that are independent from other assets, the directors estimate the
recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre tax discount rate that reflects
current market assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset or cash generating unit is estimated to
be less than its carrying amount, the carrying amount of the asset or cash
generating unit is reduced to its recoverable amount. The impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro rata based on the carrying
amount of each asset in the unit.
An impairment loss is recognised as an expense immediately.
Where an impairment loss on non financial assets subsequently reverses, the
carrying amount of the asset or cash generating unit is increased to the
revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset or cash generating unit in
prior periods. A reversal of an impairment loss is recognised in the Income
Statement immediately.
4.9 Inventories
Inventory is valued at the lower of cost and net realisable value, being the
estimated selling price less costs to complete and sell. Cost is based on the
cost of purchase on a first in, first out basis. Work in progress and finished
goods include labour and attributable overheads.
At each reporting date, inventories are assessed for impairment. If
inventories are impaired, the carrying amount is reduced to its selling price
less costs to complete and sell. The impairment loss is recognised immediately
in the Income Statement.
4.10 Cash and cash equivalents
Cash at bank comprise cash on hand, deposits held at call with banks and other
short term highly liquid investments with original maturities of three months
or less from inception.
4.11 Financial instruments
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument.
Financial assets and financial liabilities are measured initially at fair
value plus transactions costs. Financial assets and financial liabilities are
measured subsequently as described below.
Cash equivalents comprise short‑term, highly liquid investments that are
readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value. An investment with a maturity of three
months or less is normally classified as being short‑term.
Derivatives, including forward foreign exchange contracts, are initially
recognised at fair value on the date a derivative contract is entered into and
are subsequently re‑measured at their fair value. Changes in the fair value
of derivatives are recognised in the Income Statement in finance costs or
income as appropriate.
4.12 Financial assets
Trade and other receivables are recorded initially at transaction price and
subsequently measured at amortised cost. This results in their recognition at
nominal value less an allowance for any doubtful debts. This allowance for
expected credit losses (ECL) may be established where evidence of credit
deterioration is observed. In order to assess credit deterioration, the Group
considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on its historical experience and
informed credit assessment, that includes forward‑looking information. An
additional reserve is established, where required, when a loss is both
probable and the amount is known.
ECLs are a probability‑weighted estimate of lifetime credit losses. Under
the ECL model, the Group calculates the allowance for credit losses by
considering on a discounted basis the cash shortfalls it would incur in
various default scenarios for prescribed future periods and multiplying the
shortfalls by the probability of each scenario occurring. The allowance is the
sum of these probability weighted outcomes. Credit losses are measured as the
present value of all cash shortfalls (i.e. the difference between the cash
flows due to the entity in accordance with the contract and the cash flows
that Group expects to receive) with a discount factor applied to such overdue
amounts. The discount matrix ("ECL Matrix") below is applied to derive an ECL
for overdue amounts:
Past due (days)
31‑60 61‑90
90‑120 120‑250 Over 250
Discount to Amounts Overdue 0%
0% 5% 50%
100%
The Group exercises its discretion in the application of discounts outside of
the ECL Matrix based on extenuating circumstances that may apply from time to
time to the Group's trade receivables (see note 19). An example of such an
extenuating circumstance may occur when it is known that an overdue amount
will be collected post a reporting or measurement date.
4.13 Financial liabilities
The Group's financial liabilities include trade and other payables and
borrowings.
Interest bearing bank loans and overdrafts are initially recorded at fair
value, which equals the proceeds received, net of direct interest costs. They
are subsequently held at amortised cost. Finance charges, including premiums
payable on settlement or redemption are accounted for using an effective
interest rate method and are added to or deducted from the carrying amount of
the instrument to the extent that they are not settled in the period in which
they arise.
Trade and other payables are recognised initially at fair value and
subsequently measured at amortised cost. Generally, this results in their
recognition at their nominal value.
4.14 Foreign currency
The presentation currency for the Group's financial information is pounds
sterling.
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Any gain or loss on translation of
monetary foreign currency assets and liabilities arising from a movement in
exchange rates subsequent to initial measurement is included as an exchange
gain or loss in the Consolidated Statement of Profit or Loss.
The assets and liabilities of overseas subsidiary undertakings are translated
at the closing exchange rate. Income Statements and cash flows of such
subsidiaries are translated into Sterling at the average rates of exchange.
The adjustments to period end rates are taken to foreign exchange reserve in
equity and reported in the Other Comprehensive Income.
4.15 Taxation
Current taxation
Current taxation is based on the local taxable income at the local statutory
tax rate enacted or substantively enacted at the reporting date and includes
adjustments to tax payable or recoverable in respect of previous
periods.
Deferred taxation
Deferred taxation is calculated using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the historical financial information. However, if the
deferred tax arises from the initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss and does not
give rise to equal taxable and deductible temporary differences, it is not
accounted for. No deferred tax is recognised on initial recognition of
goodwill or on investment in subsidiaries. Deferred tax is determined using
tax rates and laws that have been enacted or substantively enacted by the year
end date and are expected to apply when the related deferred tax asset is
realised or the deferred tax liability is settled.
Deferred tax liabilities are provided in full, and are not discounted.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the temporary
differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the Income Statement, except where they relate to items that
are charged or credited directly to equity in which case the related deferred
tax is also charged or credited directly to equity.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority where there is an intention to settle
the balances on a net basis.
4.16 Business combination
The acquisition method of accounting is used to account for all business
combinations, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
‑ fair values of the assets transferred
‑ liabilities incurred to the former owners of the acquired business
‑ equity interests issued by the Group
‑ fair value of any asset or liability resulting from a contingent
consideration arrangement, and
‑ fair value of any pre‑existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured
initially at their fair values at the acquisition date.
Acquisition related costs are expensed as incurred.
The excess of the consideration transferred and acquisition date fair value of
any previous equity interest in the acquired entity over the fair value of the
net identifiable assets acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of the business
acquired, the difference is recognised directly in the Income Statement as a
bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts
payable in the future are discounted to their present value as at the date of
exchange. The discount rate used is the entity's incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial
liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in the Income
Statement.
4.17 Goodwill
Goodwill is initially recognised and measured as set out above.
Goodwill not attributed to a specific intangible asset is not amortised but is
reviewed for impairment at least annually. For the purpose of impairment
testing, goodwill is allocated to each of the Group's cash generating units
expected to benefit from the synergies of the combination. If the recoverable
value of the cash generating unit is less than the carrying amount of
goodwill, the impairment loss is recognised. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a cash generating unit, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
4.18 Intangible assets
Other intangible assets
Goodwill attributable to the brand name of acquired subsidiaries or customer
base is initially recognised
and measured as set out above. Licences are initially recognised at cost.
Amortisation is provided on all other intangible assets and is calculated as
follows:
Brand name 10 ‑ 15 years straight line
Customer base 10 ‑ 15 years straight line
Software 10 years straight line
The useful lives of intangible assets are annually reassessed and all assets
are reviewed for impairment at least annually. On disposal of a subsidiary,
the attributable amount of intangible assets is included in the determination
of the profit or loss on disposal.
4.19 Employment benefits
Provision is made in the financial statements for all employee benefits.
Liabilities for wages and salaries, including non monetary benefits and annual
leave obliged to be settled within 12 months of the reporting date, are
recognised in accruals.
Contributions to defined contribution pension plans are charged to the
Statement of Profit or Loss in the year to which the contributions relate.
Likewise Floors Limited, a subsidiary of the Group operates a defined benefit
pension plan for certain employees.
The amount recognised in the Consolidated Statement of Financial Position in
respect of the defined benefit plan is the present value of the defined
benefit obligation at the end of the reporting date less the fair value of
plan assets at the reporting date (if any) out of which the obligations are to
be settled.
The defined benefit obligation is calculated using the projected unit credit
method. Annually the Group engages independent actuaries to calculate the
obligation. The present value is determined by discounting the estimated
future payments using market yields on high quality corporate bonds that are
denominated in sterling and that have terms approximating to the estimated
period of the future payments ('discount rate').
Where the calculation results in a benefit to the Group, the asset recognised
is limited to the present value of any future refunds from the plan or
reductions in future contributions to the plan.
4.20 Leases
The Group assesses whether a contract is or contains a lease, at inception of
the contract. The Group recognises a right‑of‑use asset and a
corresponding lease liability with respect to all lease arrangements in which
it is the lessee, except for short‑term leases (defined as leases with a
lease term of 12 months or less) and leases of low value assets. For these
leases, the Group recognises the lease payments as an operating expense on a
straight line basis over the term of the lease unless another systematic basis
is more representative of the time pattern in which economic benefits from the
leased assets are consumed.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted by using the
rate implicit in the lease. If this rate cannot be readily determined, the
Group uses its incremental borrowing rate.
The lease liability is subsequently measured by increasing the carrying amount
to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments
made.
Right‑of‑use assets are depreciated over the shorter period of lease term
and useful life of the underlying asset.
4.21 Borrowing costs
Borrowing costs are recognised in the Statement of Profit or Loss in the year
in which they are incurred.
4.22 Share based payments
The fair value of equity instruments granted to employees is charged to the
Statement of Comprehensive Income, with a corresponding increase in equity.
The fair value of share options is measured at grant date using the
Black‑Scholes pricing model and spread over the period during which the
employee becomes unconditionally entitled to the award. The charge is adjusted
to reflect the number of shares or options that vest.
4.23 Invoice discounting
The Group has an invoice discounting arrangement. The amount owed by customers
to the Group are included within trade receivables and the amount owed to the
invoice discounting company is included within borrowings. The amount owed to
the invoice discounting company represents the difference between the amounts
advanced by the invoice discounting company and the invoices discounted. The
interest element of the invoice discounting charges and other related costs
are recognised as they accrue and are included in the Income Statement with
other finance costs.
4.24 Segment reporting
An operating segment is a component of an entity that engages in business
activities from which it may earn revenues and incur expenses (including
revenues and expenses related to transactions with other components of the
same entity), whose operating results are regularly reviewed by the entity's
Chief Operating Decision Maker to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete
financial information is available. The Chief Operating Decision Maker has
been identified as the board of executive directors, at which level strategic
decisions are made.
Details of the Group's reporting segments are provided in note 6.
4.25 Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Group will
be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present value of those cash
flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable is recognised as an
asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
5. Judgements and key sources of estimation uncertainty
The preparation of the financial statements, in conformity with adopted IFRSs
requires management to make judgements, estimates and assumptions that affect
the carrying amounts of assets and liabilities at the date of these financial
statements and the reported amount of revenues and expenses during the period.
These judgements, estimates and assumptions are continually evaluated by
management and are based upon historical experiences and other factors,
including expectations of future events that are believed to be reasonable
under the circumstances.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the statement of financial position date, that have a risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial period are as follows:
Contingent consideration
Contingent consideration may be payable in respect of acquisitions and is
calculated with reference to the Likewise Group Plc share price at a future
determination date. The fair value of contingent consideration at the date of
acquisition and subsequent remeasurement dates requires significant judgements
and estimates and is sensitive to share price changes.
Intangible assets
The Group recognises identifiable intangible assets, such as brands and
customer relationships, at fair value on acquisition of the relevant
subsidiaries. Any excess paid over the value of net assets acquired is
recognised as Goodwill in the Consolidated Statement of Financial Position and
is allocated to the appropriate business.
The annual amortisation charge and useful life is based on the period over
which management expects to benefit from the intangible assets, based on past
experience and knowledge of the business acquired.
Goodwill
Goodwill is recognised on acquisition of subsidiaries. This value is the
excess paid over the net assets acquired which cannot be separately identified
as an intangible asset. Goodwill is not amortised but is subject to an annual
impairment review.
The impairment assessment compares the carrying value of Goodwill with its
recoverable amount. The recoverable amount is determined by performing a
discounted cash flow (DCF) analysis of the Cash Generating Unit (CGU) with
reference to divisional budgets prepared by management. To prepare the DCF,
management are required to use estimates and judgement for the parameters
applied to the model of growth and termination growth rate percentages along
with the discount factor. The percentages used to calculate the growth rates
are based on prior performance along with budgets for the coming year. The
discount factor is based on the proportion of the company's cost of capital
weighted between the use of debt and equity finance.
Impairment of trade receivables
Trade and other receivables are recognised at nominal value less an allowance
for doubtful debts. This allowance for expected credit losses (ECL) may be
established where evidence of credit deterioration is observed. In order to
assess credit deterioration, the directors use reasonable and supportable
information that is relevant and available without undue cost or effort. This
includes the directors assessment of both quantitative and qualitative
information and analysis, based on its historical experience and informed
credit assessment, that includes forward‑looking information. An additional
reserve is established, where required, when the directors consider that a
loss is both probable and the amount is known. See notes 4.12 and 19 for
further information.
Inventory valuation
Inventories are stated at the lower of cost and the estimated selling price
less costs to complete and sell.
Inventory provisions are recognised to provide for short length stock
dependant on its length and using the directors judgement of likely future
sale to calculate it's likely realisable value. In addition, a provision is
recognised for any aged stock, on an increasing basis, once it's been held in
inventory for at least one year.
A significant shift in consumer market or customer demand may result in the
directors inclusion of an additional specific provision based on their
assessment of likely future sale.
Valuation of land and buildings
The Group carries its land and buildings at fair value, with changes in fair
value being recognised in Other Comprehensive Income unless losses exceed the
previously recognised gains or reflect a clear consumption of economic
benefits, in which case the excess losses are recognised in the Income
Statement. The Group engaged independent valuation specialists to determine
fair value. Significant changes in the commercial property market may impact
the valuation of the Group's property. See note 14 for further information.
6. Segmental reporting
For the purposes of segmental reporting, the Group's Chief Operating Decision
Maker (CODM) is considered to be the executive board of directors. The board
has not identified any separate operating segments within the business. The
board reviews revenue and expenses for the business as a whole and makes
decisions about resources and assesses performance based on this information.
Revenue arises entirely through the wholesale of goods. Segmental analysis is
therefore not presented.
The Group is not reliant on any one customer and no customer exceeds 10% of
total annual turnover.
The following is an analysis of the Group's revenue for the year from
continuing operations:
2023 2022
£ £
139,538,014 123,642,673
Sale of goods
139,538,014 123,642,673
The Group generates revenue from both the UK and overseas as detailed below:
2023 2022
£ £
139,297,993 123,432,273
United Kingdom
229,533 182,417
Rest of Europe
10,488 27,983
Rest of the world
139,538,014 123,642,673
7. Operating profit
Operating profit is stated after charging:
2023 2022
£ £
1,496,198 1,217,258
Depreciation of property, plant and equipment
3,024,379 2,049,591
Depreciation of right‑of‑use assets
(331) 31,229
(Profit)/loss on foreign exchange
Short term lease expense:
172,446 174,539
‑ plant
188,500 150,000
‑ property
404,370 366,507
Amortisation of intangible assets
274,841 319,678
Share based payments
95,466 497,968
Loss from new operations
283,933 486,536
Exceptional investment in point of sale
852,200 -
Strategic location and establishment costs
- 1,455,992
Acquisition fees and related costs
Losses from new operations relate to costs incurred in the initial start‑up
phase whilst the business is in its initial development phase and therefore
not generating significant returns.
Exceptional investment in point of sale relate to accelerated expenses
incurred in increasing the Group's market presence from providing heavily
discounted in‑store displays to retailers in order to accelerate the growth
in market share. This amount relates to specific strategic stand placements
over and above what is incurred in the ordinary course of business recognised
in the Consolidated Statement of Profit or Loss.
Strategic relocation and establishment costs relate to costs incurred in the
relocation and establishment of the new 47,000 sq. ft. high bay Distribution
Hub in Glasgow for Likewise Scotland, the relocation and establishment of the
Likewise London business to new facilities in Sidcup, the commencement of
costs incurred in the forthcoming closure of the A&A Manchester facility
as this looks forward to moving to brand new facilities in June 2024 and
closure costs incurred for H&V's small warehouse facility in Muelebeke,
Belgium. Additionally, extra depreciation costs of £144,845 and extra
interest costs of £213,005 were incurred bringing total strategic relocation
and establishment costs to £1,210,050 as noted in the Strategic Report.
Acquisition costs related to the acquisition of Valley Wholesale Carpets and
Delta Carpets in the prior year.
8.
Auditors' remuneration
2023 2022
£ £
150,000 150,000
Fees payable to the Group's auditors for the audit of the Group's financial
statements
Fees payable to the Group's auditors:
- 500
‑ taxation advisory services
- 62,000
‑ work in respect of acquisition due diligence
9. Directors and employees
Group
2023 2022
£ £
Employee benefit expenses (including directors) comprise:
18,215,855 16,289,890
Wages and salaries
1,946,475 1,722,647
National insurance
513,550 500,267
Defined contribution pension cost
- 15,541
Compensation for loss of office
274,841 319,678
Share based payment expenses
20,950,721 18,848,023
Key management personnel compensation
Key management personnel are those persons having authority and responsibility
for planning, directing and controlling the activities of the Group, including
the directors of the Company listed on page 1, and other senior management.
2023 2022
£ £
1,159,356 1,703,375
Salary
147,521 214,322
Social security costs
61,350 61,350
Group pension contribution to defined contribution schemes
68,462 82,468
Share based payments
1,436,689 2,061,515
As at 31 December 2023, 1,285,714 share options remained active under the
Group's SAYE scheme (2022 ‑ 1,285,714). During the year no options were
granted to key management personnel, no options lapsed and no options were
exercised. These options may be exercised between March and October 2024. Post
year end, 300,000 of these options were exercised during March 2024.
As at 31 December 2023, 5,900,000 share options remained active under the
Group's EMI scheme (2022 ‑ 5,900,000). During the year no options were
granted to key management personnel, no options lapsed and no options were
exercised. These options may be exercised from January 2024. No options have
yet been exercised up to the date of this publication.
Group
The monthly average number of persons, including the directors, employed by
the Group during the year was as follows:
2023 2022
No. No.
5 5
Directors
462 450
Other employees
467 455
The monthly average number of persons, including the Directors, employed by
the Company during the year was 8 (2022 - 12).
2023 2022
£ £
Remuneration of directors
649,972 939,327
Remuneration
79,465 107,188
Social security costs
25,600 25,600
Group pension contribution to defined contribution schemes
12,869 14,418
Share based payments
767,906 1,086,533
In addition, fees of £Nil (2022 ‑ £Nil) were paid to non‑executive
directors in the year.
The highest paid director received remuneration in the year of £292,368 (2022
‑ £488,780) and pension contributions were made of £Nil (2022 ‑ £Nil).
2023 2022
No. No.
1 1
Directors accruing benefits under money purchase pension schemes
1 1
2,700,000 share options were granted to directors during 2019 at an exercise
price of £0.10 per share. There have been no options exercised or additional
options granted since this time. These options may be exercised between
January and March 2024.
10. Finance income and expense
Recognised in profit or loss
2023 2022
£ £
Finance income
Interest on:
Bank deposits 52,330 -
- 5,043
Other interest receivable
Total finance income 52,330 5,043
Finance expense
164,269 74,575
Bank interest payable
1,038,548 571,009
Interest on lease liabilities
304 22,283
Other interest payable
284,595 128,976
Invoice discounting facility interest payable
Total finance expense 1,487,716 796,843
Net finance expense recognised in profit or loss (1,435,386) (791,800)
11. Taxation on ordinary activities
11.1 Income tax recognised in profit or loss
2023 2022
£ £
Current tax
(19,770) (70,812)
Adjustments in respect of prior years
Total current tax (19,770) (70,812)
Deferred tax expense
(635,824) (699,135)
Origination and reversal of timing differences
- 191,932
Effect of change in tax rates
Total deferred tax (635,824) (507,203)
Total tax credit (655,594) (578,015)
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax in the United Kingdom applied to profits
for the year are as follows:
2023 2022
£ £
844,025 (836,304)
Profit/(loss) for the year
(655,594) (578,015)
Income tax expense/(credit)
Profit/(loss) before income taxes 188,431 (1,414,319)
44,281 (268,721)
Tax using the Company's domestic tax rate of 23.5% (2022:19%)
86,308 391,971
Fixed asset differences
(19,092) 345,325
(Income)/expenses not deductible for tax purposes
(19,770) (70,812)
Adjustments to tax charge in respect of prior periods
3,774 (2,619)
Non‑taxable consolidation adjustments
12,383 (30,975)
Remeasurement of deferred tax
(767,116) (932,774)
Movement in deferred tax not recognised
(18,245) -
Chargeable losses
21,883 (9,410)
Other differences leading to an increase/(decrease) in the tax charge
Total tax credit (655,594) (578,015)
Changes in tax rates and factors affecting the future tax
charges
At 31 December 2023, the Group has tax losses of £13,955,031 (2022 ‑
£11,539,175) which are available for offset against future taxable profits.
The main rate of corporation tax changed on 1 April 2023 from 19% to 25% (with
marginal rate relief available for companies with small profits). As the
current financial year includes periods before and after the change in tax
rate, the effective rate applicable to profits generated in the year ended 31
December 2023 is 23.5%.
11.2 Deferred tax balances
The following is the analysis of deferred tax assets/(liabilities) presented
in the consolidated statement of financial position:
2023 2022
£ £
(1,866,950) (2,496,677)
Deferred tax liabilities
A deferred tax asset of £1,318,295 (2022 ‑ £1,577,985) has not been
recognised in the financial statements in relation to tax losses. In addition
a deferred tax asset of £162,970 (2022 ‑ £Nil) has not been recognised in
the financial statements in relation to the future tax benefit on the future
exercise of employee share options. A deferred tax asset has not been
recognised in the year where it is uncertain that the asset will crystallise
in the foreseeable future.
A deferred tax asset of £903,116 (2022 ‑ £348,793) has been recognised for
the Company. This primarily related to losses carried forward which are
expected to be utilised in future periods.
Opening balance Recognised in profit or loss Recognised in other comprehensive income Closing balance
£ £ £ £
2023
Fixed asset timing differences (1,303,975) (267,323) - (1,571,298)
Arising from business combinations (1,052,221) 98,217 - (954,004)
Capital gains (1,569,838) 25,489 (6,097) (1,550,446)
Short term timing differences 122,548 (84,213) - 38,335
Losses and other deductions 1,306,809 863,654 - 2,170,463
(2,496,677) 635,824 (6,097) (1,866,950)
Opening balance Recognised in profit or loss Acquisition/ disposals Closing balance
£ £ £ £
2022
Fixed asset timing differences (653,904) (381,332) (268,739) (1,303,975)
Arising from business combinations (880,249) 91,627 (263,599) (1,052,221)
Capital gains (502,946) - (1,066,892) (1,569,838)
Short term timing differences 19,366 103,182 - 122,548
Losses and other deductions 613,083 693,726 - 1,306,809
(1,404,650) 507,203 (1,599,230) (2,496,677)
12. Earnings per share
(i) Basic and diluted loss per share
The total basic profit per share attributable to the ordinary equity holders
of the Company was £0.003 (2022 ‑ loss of £0.003). The total diluted
profit per share attributable to the ordinary equity holders of the Company
was £0.003 (2022 ‑ loss of £0.003).
2023 2022
Pence Pence
0.3 (0.3)
From continuing operations attributable to the ordinary equity holders of the
Company
Total basic earnings per share attributable to the ordinary equity holders of 0.3 (0.3)
the Company
(ii) Reconciliation of earnings used in calculating earnings per share
2023 2022
£ £
Profit/(loss) attributable to the ordinary equity holders of the Company used
in calculating basic earnings per share:
844,025 (836,304)
Used in calculating basic and diluted earnings per share
(iii) Weighted average number of shares used as the denominator
2023 2022
Number Number
243,884,066 241,979,322
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
4,413,734 23,640,830
Options
2,900,000 2,800,000
Warrants
Weighted average number of ordinary shares and potential ordinary shares used 251,197,800 268,420,152
as the denominator in calculating diluted earnings per share
13. Dividends
2023 2022
£ £
487,717 -
Final dividend of £0.002 paid per Ordinary Share in the year (2022 ‑ £Nil)
in relation to the prior year results
243,964 487,590
Interim dividend of £0.001 paid per Ordinary Share in the year (2022 ‑
£0.002).
731,681 487,590
The directors are proposing a final dividend of £0.0025 per share (2022 ‑
£0.002). The dividend has not been accrued in the consolidated statement of
financial position.
14.
Property, plant and equipment
Group
Land and buildings - Right of use assets ‑ leasehold property Leasehold improvements Plant and machinery Motor vehicles Fixtures, fittings & computer equipment Right of use assets ‑ other Total
freehold and long leasehold
£ £ £ £ £ £ £ £
Cost or valuation
5,785,000 8,976,689 298,719 1,928,736 657,796 1,161,407 3,870,997 22,679,344
At 1 January 2022
517,757 8,172,355 18,692 1,543,168 202,306 983,331 2,577,922 14,015,531
Additions
15,966,907 - - 102,981 810,247 42,071 - 16,922,206
Acquisition of subsidiary
- (434,574) (10,219) - (105,735) (40,469) (301,273) (892,270)
Disposals
- - - - 836 - - 836
Foreign exchange movements
22,269,664 16,714,470 307,192 3,574,885 1,565,450 2,146,340 6,147,646 52,725,647
At 31 December 2022
38,208 - - 1,339,637 1,119,665 500,083 2,702,800 5,700,393
Additions
- (324,440) (1,502) (48,319) (293,093) (3,034) (148,766) (819,154)
Disposals
- - - 7,739 - (7,739) - -
Transfers between classes
(183,043) - - - - - - (183,043)
Revaluations
22,124,829 16,390,030 305,690 4,873,942 2,392,022 2,635,650 8,701,680 57,423,843
At 31 December 2023
Land and buildings - Leasehold improvements Plant and machinery Motor vehicles Fixtures, fittings & computer equipment Right of use assets ‑ other Total
freehold Right of use assets ‑ leasehold property
and long leasehold
£ £ £ £ £ £ £ £
Accumulated depreciation and impairment
At 1 January 2022 - 997,305 30,719 248,735 410,439 327,114 946,311 2,960,623
Charge for the year 309,957 - 30,096 297,108 341,492 238,605 - 1,217,258
Charge for right‑of‑use assets - 962,408 - - - - 1,087,183 2,049,591
Transfer intra group - - - 5,636 - (5,636) - -
Disposals - (145,960) (10,219) - (53,089) (1,405) (281,543) (492,216)
On revalued assets (309,957) - - - - - - (309,957)
Exchange adjustments - - - (612) 836 (97) - 127
At 31 December 2022
- 1,813,753 50,596 550,867 699,678 558,581 1,751,951 5,425,426
Charge for the year 309,389 - 30,719 438,768 402,058 315,264 - 1,496,198
Charge for right‑of‑use assets - 1,224,103 - - - - 1,800,276 3,024,379
Disposals - (324,440) - (40,158) (206,689) (11,515) (117,615) (700,417)
On revalued assets (207,432) - - - - - - (207,432)
101,957 2,713,416 81,315 949,477 895,047 862,330 3,434,612 9,038,154
At 31 December 2023
Net book value
At 1 January 2022 5,785,000 7,979,384 268,000 1,680,001 247,357 834,293 2,924,686 19,718,721
At 31 December 2022 22,269,664 14,900,717 256,596 3,024,018 865,772 1,587,759 4,395,695 47,300,221
At 31 December 2023 22,022,872 13,676,614 224,375 3,924,465 1,496,975 1,773,320 5,267,068 48,385,689
If the freehold and long leasehold property had not been included at
valuation, it would have been included under the historical cost convention as
follows:
Cost of £19,622,872 (2022 £19,584,664)
Depreciation of £704,974 (2022 £449,285)
Net book value of £18,917,898 (2022 £19,135,379)
14.1. Assets held under leases
The net book value of owned and leased assets included as "Property, plant and
equipment" in the Consolidated Statement of Financial Position is as follows:
31 December 2023 31 December 2022
£ £
29,442,007 28,003,809
Property, plant and equipment owned
18,943,682 19,296,412
Right‑of‑use assets
48,385,689 47,300,221
Information about right‑of‑use assets is summarised below:
Net book value
31 December 2023 31 December 2022
£ £
13,676,614 14,900,717
Property
5,267,068 4,395,695
Motor vehicles & plant and machinery
18,943,682 19,296,412
Depreciation charge for the year ended
31 December 2023 31 December 2022
£ £
1,224,103 962,408
Property
1,800,276 1,087,183
Motor vehicles & plant and machinery
3,024,379 2,049,591
14.2 Fair value measurement and Impairment
Fair value measurement
Included in land and buildings is land with a cost of £6,254,057 (2022 ‑
£6,254,057) which is not depreciated.
The Group's freehold and long leasehold land and buildings are stated at their
revalued amounts, being the fair value at the date of revaluation, less any
subsequent accumulated depreciation and subsequent accumulated impairment
losses.
The Group acquired £4,872,179 freehold and £11,094,728 long leasehold land
and buildings as part of the acquisition of the Valley Wholesale Carpets.
These were valued at a total of £15,966,907 by the directors at the date of
acquisition based on valuations obtained on 13 July 2022 by BNP Paribas Real
Estate, independent valuers not related to the Group.
The Group obtained valuations on these freehold and leasehold properties at
the reporting date from Gerald Eve LLP.
As the valuations obtained from Gerald Eve were not materially different to
the original valuation, the directors have decided to revalue both the
freehold and leasehold properties back to the original valuation plus
improvements made in the current financial year.
In addition, the Group holds freehold property in its subsidiary William Armes
Holdings Limited which was valued at £5,500,000 as at 8 February 2024 by
Gerald Eve LLP, independent valuers not related to the Group. The directors do
not believe that this valuation is materially different to the valuation at
the year end for this property.
Gerald Eve LLP and BNP Paribas Real Estate are chartered surveyors and
property consultants that have appropriate qualifications and recent
experience in the fair value measurement of properties in the relevant
locations. The valuation reports have been prepared in accordance with Royal
Institution of Chartered Surveyors ("RICS") Valuation ‑ Global Standards
(incorporating the IVSC International Valuation Standards) issued November
2021 and effective from 31 January 2022 together, where applicable, with the
UK National Supplement effective from 14 January 2019, together the "Red
Book".
Property valuations are complex, require a degree of judgement and are based
on data that may or may not be publicly available. Valuation of investment
property and the respective inputs have been classified as level 3 inputs as
defined by IFRS 13 Fair Value Measurement. Level 3 means that the valuation
model cannot rely on inputs that are directly available from an active market;
however there are related inputs from recent property sales that can be used
as a basis.
The freehold property in Sudbury has been valued using the traditional "all
risks" yield method of valuation, having regard to comparable evidence and
current market sentiment. In establishing fair value, the most significant
unobservable input is considered to be the appropriate yield to apply to the
rental income. This is based on a number of factors including financial
covenant strength of the tenant, location, marketability of the unit if it
were to become vacant, quality of the property and its scope for potential
alternative uses.
The yield applied in the valuation is 6.6%. Assuming all else stayed the same;
a decrease of 1% in the yield would result in an increase in fair value of
£1,032,000. An increase of 1% in the yield would result in a decrease in fair
value of £760,000.
The properties acquired as part of the acquisition of Valley Wholesale
Carpets, consisting of two freehold units and a long‑leasehold site have
been valued using the market (comparative) method of valuation, multiplying
the capital value per square foot by the size of the respective buildings. In
determining the capital value, the valuers have utilised observable capital
values from recent sales in similar locations, condition and size to the
respective sites.
The revaluation gain on land and buildings for 2023 of £24,389 (2022 ‑ gain
of £309,957) has been recognised within Other Comprehensive Income.
Capital commitments
As at 31 December 2023, the Group had capital commitments totalling £Nil
(2022 ‑ £1,090,204).
14.3 Assets pledged as security
There is a floating charge against the assets of the subsidiary Likewise
Floors Limited, from NatWest Bank PLC.
There is a fixed charge over the freehold land and buildings held by the Group
in respect of the bank loans in place for the Group.
Company
Right of use assets ‑ leasehold property Leasehold improvements Motor vehicles Fixtures, fittings & computer equipment Right of use assets ‑ other Total
£ £ £ £ £ £
Cost or valuation
66,422 10,219 - 42,299 - 118,940
At 1 January 2022
5,513,875 - 112,000 8,095 39,248 5,673,218
Additions
(66,422) (10,219) (112,000) - - (188,641)
Disposals
5,513,875 - - 50,394 39,248 5,603,517
At 31 December 2022
- - 96,995 14,887 - 111,882
Additions
At 31 December 2023
5,513,875 - 96,995 65,281 39,248 5,715,399
Right of use assets ‑ leasehold property Leasehold improvements Motor vehicles Fixtures, fittings & computer equipment Right of use assets - other Total
£ £ £ £ £ £
Accumulated depreciation and impairment
At 1 January 2022 66,422 10,219 - 13,495 - 90,136
Charge for the year - - 5,600 9,920 - 15,520
Charge for right‑of‑use assets 90,531 - - - 2,186 92,717
(66,422) (10,219) (5,600) - - (82,241)
Disposals
90,531 - - 23,415 2,186 116,132
At 31 December 2022
- - 6,466 11,255 - 17,721
Charge for the year
319,400 - - - 13,083 332,483
Charge for right‑of‑use assets
409,931 - 6,466 34,670 15,269 466,336
At 31 December 2023
Net book value
- - - 28,804 - 28,804
At 1 January 2022
5,423,344 - - 26,979 37,062 5,487,385
At 31 December 2022
5,103,944 - 90,529 30,611 23,979 5,249,063
At 31 December 2023
14.4. Assets held under leases
The net book value of owned and leased assets included as "Property, plant and
equipment" in the Company Statement of Financial Position is as follows:
31 December 2023 31 December 2022
£ £
121,140 26,979
Property, plant and equipment owned
5,127,923 5,460,406
Right‑of‑use assets
5,249,063 5,487,385
Information about right‑of‑use assets is summarised below:
Net book value
31 December 2023 31 December 2022
£ £
5,103,944 5,423,344
Property
23,979 37,062
Motor vehicles & plant and machinery
5,127,923 5,460,406
15. Intangible assets
Group
Delta Carpets Customer base Likewise Floors Customer base Delta Carpets Brandname Software Likewise Floors Brandname Total
£ £ £ £ £ £
Cost
- 2,122,349 - - 2,189,075 4,311,424
At 1 January 2022
513,684 - 540,710 - - 1,054,394
Additions on acquisition of subsidiary
513,684 2,122,349 540,710 - 2,189,075 5,365,818
At 31 December 2022
- - - 133,983 - 133,983
Additions
513,684 2,122,349 540,710 133,983 2,189,075 5,499,801
At 31 December 2023
Delta Carpets Customer base Likewise Floors Customer base Delta Carpets Brandname Software Likewise Floors Brandname Total
£ £ £ £ £ £
Accumulated amortisation and impairment
- 389,097 - - 401,330 790,427
At 1 January 2022
38,526 141,490 40,553 - 145,938 366,507
Charge for the year
38,526 530,587 40,553 - 547,268 1,156,934
At 31 December 2022
51,368 141,490 54,071 11,503 145,938 404,370
Charge for the year
At 31 December 2023 89,894 672,077 94,624 11,503 693,206 1,561,304
Net book value
- 1,733,252 - - 1,787,745 3,520,997
At 1 January 2022
475,158 1,591,762 500,157 - 1,641,807 4,208,884
At 31 December 2022
423,790 1,450,272 446,086 122,480 1,495,869 3,938,497
At 31 December 2023
Company
Software
£
Cost
133,983
Additions
At 31 December 2023
133,983
Software
£
Accumulated amortisation and impairment
11,503
Charge for the year
At 31 December 2023 11,503
Net book value
122,480
At 31 December 2023
16. Goodwill
Group
2023 2022
£ £
5,624,284 5,624,284
Cost
5,624,284 5,624,284
2023 2022
£ £
Cost
5,624,284 4,216,728
At 1 January
- 1,407,556
Additions on acquisition of subsidiaries
At 31 December 5,624,284 5,624,284
Accumulated impairment
At 31 December - -
16.1 Allocation of goodwill to cash generating units
The carrying amount of goodwill has all been allocated to the Group's primary
activity of wholesale distribution and has been allocated to trading brands as
follows:
2023 2022
£ £
3,253,210 3,253,210
Likewise Floors Limited
467,847 467,847
Lewis Abbott Limited
307,230 307,230
H&V Carpets BVBA
188,441 188,441
A. & A. Carpets Limited
234,864 234,864
Valley Wholesale Carpets Limited
1,172,692 1,172,692
Delta Carpets Limited
5,624,284 5,624,284
The Group tests goodwill annually for impairment, or more frequently if there
are indications that goodwill might be impaired.
The goodwill is a reflection of the benefit the acquisitions of subsidiaries
will have on the Group by offering greater geographic coverage and providing
the opportunity to expand this further than is currently the case. The
acquisitions will benefit from the collective marketing and the enhanced
product range available to all Group companies. Ultimately this will enable
the acquired businesses and the existing Group members to provide an improved
customer service, across a wider geographic area, with a greater product
portfolio designed to help the Group to continue its development.
The Group has conducted an analysis of the sensitivity of the impairment test
to changes in the key assumptions used in the supporting five year forecasts
being a discount rate of 12% and growth rates ranging from 3 ‑ 11% dependent
on the specific CGU.
Likewise Floors Limited
The break even point of goodwill for Likewise Floors Limited is at a growth
level of ‑10.4% with terminal growth factor of 2%.
Lewis Abbott Limited
The break even point of goodwill for Lewis Abbott Limited is at a growth level
of ‑62.1% with terminal growth factor of 2%.
H&V Carpets BVBA
The break even point of goodwill for H&V Carpets BVBA is at a growth level
of ‑1.1% with terminal growth factor of 1%.
A. & A. Carpets Limited
The break even point of goodwill for A. & A. Carpets Limited is at a
growth level of ‑1.7% with terminal growth factor of 1%.
Valley Wholesale Carpets Limited
The break even point of goodwill for Valley Wholesale Carpets Limited is at a
growth level of ‑18.4% with terminal growth factor of 1%.
Delta Carpets Limited
The break even point of goodwill for Delta Carpets Limited is at a growth
level of ‑8.0% with terminal growth factor of 1%.
17. Subsidiaries
Details of the Group's material subsidiaries at the end of the reporting
period are as follows:
Name of subsidiary Place of incorporation and operation Proportion of ownership interest and voting power held by the Group (%)
Principal activity
2023 2022
1) Likewise Floors Limited Wholesale distribution of floor coverings and associated products England & Wales 100 100
2) H&V Carpets BVBA Wholesale distribution of floor coverings and associated products Belgium 100 100
3) Valley Wholesale Carpets (2004) Limited Holding company England & Wales 100 100
4) Valley Wholesale Carpets Limited (100% subsidiary of Valley Wholesale Wholesale distribution of floor coverings and associated products England & Wales 100 100
Carpets (2004) Limited)
5) Delta Carpets (Holdings) Limited (100% subsidiary of Likewise Floors Holding company England & Wales 100 100
Limited)
6) Delta Carpets Limited (100% subsidiary of Delta Carpets (Holdings) Limited) Dormant company England & Wales 100 100
7) Likewise Holdings Limited (formerly William Armes Holdings Limited) Holding company England & Wales 100 100
8) William Armes Limited (100% subsidiary of William Armes Holdings Limited) Dormant company England & Wales 100 100
9) A. & A. Carpets Limited Dormant company England & Wales 100 100
10) Likewise Trading Limited Holding company England & Wales 100 100
11) Lewis Abbott Limited (100% subsidiary of Likewise Trading Limited) Dormant company England & Wales 100 100
12) Factory Flooring Outlet Ltd (100% subsidiary of Likewise Floors Limited) Dormant company England & Wales 100 100
13) Likewise Limited Dormant company England & Wales 100 100
The registered offices of H&V Carpets BVBA are Nijverheidsstraat 26, 8760
Meulebeke, Belgium. The registered offices of all other companies within the
Group are Unit 4 Radial Park, Radial Way, Birmingham Business Park, Solihull,
England, B37 7WN.
Company ‑ Shares in Group undertakings
2023 2022
£ £
42,119,270 11,738,831
At 1 January
- 30,158,850
Additions
190,115 221,589
Share options
42,309,385 42,119,270
The Group considers impairment of its subsidiaries annually, this is assessed
in the context of the Group's structure, and if appropriate an impairment
provision is made.
18. Inventories
Group
2023 2022
£ £
20,253,799 18,388,527
Finished goods and goods for resale
20,253,799 18,388,527
2023 2022
£ £
97,306,471 87,172,444
Amounts of inventories recognised as an expense during the year
1,123,021 395,225
Amounts of inventories impaired during the year
The Company did not hold any inventories in either the current or prior year.
19. Trade and other receivables
Group
2023 2022
£ £
12,802,078 12,007,770
Trade receivables
(369,399) (302,989)
Less: provision for impairment of trade receivables
Trade receivables ‑ net 12,432,679 11,704,781
2,309,125 1,586,490
Prepayments
2,938,182 2,282,032
Other receivables
Total trade and other receivables 17,679,986 15,573,303
Total current portion (17,679,986) (15,573,303)
Company
2023 2022
£ £
6,543,832 8,265,009
Receivables from related parties
Total financial assets other than cash and cash equivalents classified as 6,543,832 8,265,009
loans and receivables
355,900 72,722
Prepayments
50,121 31,205
Other receivables
Total trade and other receivables 6,949,853 8,368,936
(355,900) (72,722)
Less: current portion ‑ prepayments and accrued income
(50,121) (31,205)
Less: current portion ‑ other receivables
(6,543,832) (8,265,009)
Less: current portion ‑ receivables from related parties
Total current portion (6,949,853) (8,368,936)
Total non‑current portion - -
All of the above amounts are financial assets of the Group and Parent Company
except certain prepayments.
The directors consider the carrying value of Group trade and other receivables
is approximate to its fair value, after incorporating an impairment provision
of £369,399 (2022 ‑ £302,989).
Trade receivables comprise amounts due from customers for goods sold. The
Group's normal trade credit terms range from 30 to 60 days and therefore all
are classified as current. There are a limited number of customers who are
granted extended credit terms but these are not considered material to the
financial statements. Trade receivables are recognised initially at the amount
of consideration that is unconditional. The Group holds the trade receivables
with the objective to collect the contractual cash flows and therefore
measures them subsequently at amortised cost.
The Group's credit risk is primarily attributable to its trade receivables.
The amounts presented in the Consolidated Statement of Financial Position are
net of allowances for doubtful receivables. An allowance for impairment is
made where there is an identified loss event which, based on previous
experience, is evidence of a reduction in the recoverability of the cash
flows. The Group has no significant concentration of credit risk, with
exposure spread over a large number of customers.
Group Group
2023 2022
£ £
7,060,259 6,360,941
Not more than 30 days
3,957,155 3,638,050
More than 30 days but not more than 60 days
773,893 986,714
More than 60 days but not more than 90 days
126,006 135,723
More than 90 days but not more than 120 days
884,765 886,342
More than 120 days
(369,399) (302,989)
Loss allowance
12,432,679 11,704,781
The expected credit loss allowance is calculated using a weighted probability
of loss based on age of the receivable:
2023 ECL
£
114,420 5,721
More than 90 days but not more than 120 days ‑ 5% (adjusted ‑ see below)
591,765 295,883
More than 120 days ‑ 50% (adjusted for payment plans ‑ see below)
- 67,795
Additional loss allowance
369,399
706,185
The debtors balance to which the ECL has been applied has been adjusted where
there are specific payment plans in place.
2023
£
Reconciliation of ECL allowance balance
302,989
Balance at 1 January
266,087
ECL allowance charged to profit or loss
(199,677)
Other movements
369,399
The carrying amounts of the trade receivables include receivables which are
subject to a factoring agreement. Under this arrangement, the subsidiary
trading companies have transferred the relevant receivables to the factor in
exchange for cash and are prevented from selling or pledging the receivables.
However, the subsidiaries retain the late payment and credit risk. The Group
therefore continues to recognise the transferred assets in their entirety in
its Consolidated Statement of Financial Position. The amount repayable under
the factoring agreement is presented as secured borrowing. The Group considers
the held to collect business model to remain appropriate for these receivables
and hence continues measuring them at amortised cost.
The relevant carrying amounts are:
2023 2022
£ £
6,873,509 5,851,797
Factored receivables
(5,155,132) (4,389,016)
Associated secured borrowings
20. Cash and cash equivalents
Group Group Company Company
2023 2022 2023 2022
£ £ £ £
5,709,229 5,913,155 182,420 689,259
Cash at bank and in hand
5,709,229 5,913,155 182,420 689,259
21. Trade and other payables
Group
2023 2022
£ £
21,638,744 18,106,217
Trade payables
533,997 429,321
Other payables
1,462,027 1,727,216
Accruals
Total financial liabilities, excluding loans and borrowings, classified as 23,634,768 20,262,754
financial liabilities measured at amortised cost
1,880,688 1,707,672
Other payables ‑ tax and social security payments
4,250,515 5,380,365
Deferred consideration
Total trade and other payables 29,765,971 27,350,791
(21,638,744) (18,106,217)
Less: current portion ‑ trade payables
(2,414,685) (2,136,993)
Less: current portion ‑ other payables
(1,462,027) (1,727,216)
Less: current portion ‑ accruals
(4,250,515) (1,000,000)
Less: current portion ‑ deferred consideration
Total current portion (29,765,971) (22,970,426)
Total non‑current position - 4,380,365
Company
2023 2022
£ £
258,578 27,657
Trade payables
10,564,144 9,569,537
Payables to related parties
1,350 1,350
Other payables
254,491 480,257
Accruals
Total financial liabilities, excluding loans and borrowings, classified as 11,078,563 10,078,801
financial liabilities measured at amortised cost
110,700 116,772
Other payables ‑ tax and social security payments
3,855,000 4,984,750
Deferred consideration
Total trade and other payables 15,044,263 15,180,323
(258,578) (27,657)
Less: current portion ‑ trade payables
(10,564,144) (9,569,537)
Less: current portion ‑ payables to related parties
(112,050) (118,122)
Less: current portion ‑ other payables
(254,491) (480,257)
Less: current portion ‑ accruals
(3,855,000) (1,000,000)
Less: current portion ‑ deferred income
Total current portion (15,044,263) (11,195,573)
Total non‑current position - 3,984,750
Trade payables and accruals principally comprise amounts outstanding in
relation to trade purchases and ongoing costs. Trade payables are unsecured
and the Group has financial risk management procedures in place to ensure that
all payables are paid within pre‑agreed credit terms.
The directors consider the carrying value of trade and other receivables is
approximate to its fair value due to their short term nature.
All of the above amounts are financial liabilities of the Group and Parent
Company except social security and other taxes.
22. Loans and borrowings
Group
2023 2022
£ £
Non‑current
2,342,222 1,456,025
Bank loans ‑ secured
18,401,597 18,766,025
Lease liabilities
20,743,819 20,222,050
Current
5,273,300 4,595,139
Bank loans and invoice discounting facility
4,373,760 3,182,373
Lease liabilities
9,647,060 7,777,512
Total loans and borrowings 30,390,879 27,999,562
Company
2023 2022
£ £
Non‑current
2,342,222 1,456,025
Bank loans ‑ secured
5,187,733 5,226,397
Lease liabilities
6,682,422
7,529,955
Current
118,168 206,123
Bank loans ‑ secured
376,067 320,191
Lease liabilities
494,235 526,314
Total loans and borrowings 8,024,190 7,208,736
The directors consider that the carrying amount of the invoice discounting
facility and bank loan approximates their fair value.
The invoice discounting facility is secured against the related trade debtor
balances and by a floating charge over the assets of the Group. The invoice
discounting facility is denominated in Sterling and Euro.
The invoice discounting facility is held for Likewise Floors Limited and has a
fixed service charge of £18,000 per annum.
2023 2022
£ £
Amounts repayable under bank loans ‑ Group and Company
118,168 206,123
Within one year
462,401 706,822
In the second to fifth year inclusive
1,879,821 749,203
Beyond five years
2,460,390 1,662,148
During the year the Company restructured their bank loans resulting in a
principal loan value of £2,495,000 drawn down in July 2023. Repayments
commenced in September 2023 and will continue until July 2038. The loan is
secured by a fixed and floating charge over the Group's assets. The loan
carries interest at on a floating rate basis with interest at Bank of England
rate plus a margin of 2.35%.
This loan is at a floating interest rate and exposes the Group to fair value
interest rate risk.
On 8 December 2023, the subsidiary company Valley Wholesale Carpets Limited
entered a trade loan facility agreement with Barclays Bank Plc. This agreement
provides the company with the facility to drawdown up to a maximum limit of
£2,500,000 available at their request. No funds were drawn down at 31
December 2023.
23. Leases
Group
(i) Leases as a lessee
The Group's leases include leases for buildings, plant and motor vehicles. The
average lease term is 13 years for buildings and 4 years for other fixed
assets.
Various lease incentives of rent‑free or reduced rent periods are included
in the measurement of the right‑of‑use asset and lease liability at
inception of the lease. These predominantly relate to the Group's property
lease portfolio.
Lease liabilities are due as follows:
2023 2022
£ £
Contractual undiscounted cash flows due
4,613,991 3,357,091
Not later than one year
11,812,221 11,018,626
Between one year and five years
13,109,026 15,073,388
Later than five years
29,535,238
29,449,105
22,775,357 21,948,398
Lease liabilities included in the Consolidated Statement of Financial Position
at 31 December
18,401,597 18,766,025
Non‑current
4,373,760 3,182,373
Current
The following amounts in respect of leases have been recognised in profit or
loss:
2023 2022
£ £
1,038,548 571,009
Interest expense on lease liabilities
3,024,379 2,049,591
Depreciation on lease liabilities
(18,358) (34,535)
Profit on termination of lease liabilities
360,946 324,539
Expense relating to short‑term leases
Company
(ii) Leases as a lessee
The Company's leases include leases for buildings and other assets. The
average lease term is 15 years for buildings and 3 years for other fixed
assets.
Lease liabilities are due as follows:
2023 2022
£ £
Contractual undiscounted cash flows due
376,406 328,506
Not later than one year
2,295,234 2,100,777
Between one year and five years
6,709,897 7,280,760
Later than five years
9,381,537 9,710,043
5,563,800 5,546,588
Lease liabilities included in the Company Statement of Financial Position at
31 December
5,187,733 5,226,397
Non‑current
376,067 320,191
Current
The following amounts in respect of leases have been recognised in profit or
loss:
2023 2022
£ £
347,292 42,148
Interest expense on lease liabilities
332,483 92,717
Depreciation on lease liabilities
45,754 25,704
Expense relating to short‑term leases
24. Financial instruments
Classification of financial instruments
The fair value hierarchy groups financial assets and liabilities into three
levels based on the significance of inputs used in measuring the fair value of
the financial assets and liabilities.
The fair value hierarchy has the following levels:
• Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
• Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
• Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is
determined based on the lowest level of significant input to the fair value
measurement.
The only financial instruments the Group holds which are measured at fair
value through the Income Statement (as level 2 above) are forward currency
contracts (see note 26) and deferred consideration in relation to shares
issued on acquisition of subsidiaries. The deferred consideration liability
held at fair value at 31 December 2023 totalled £4,250,515 (2022 ‑
£4,380,365). All other financial assets and liabilities are held at amortised
cost.
The tables below set out the Group's accounting classification of each class
of its financial assets and liabilities.
Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Financial assets at amortised cost
12,432,679 11,704,781 - -
Trade receivables
- - 6,543,832 8,265,009
Amounts owed by Group undertakings
2,938,182 2,282,032 50,121 31,205
Other receivables
5,709,229 5,913,155 182,420 689,259
Cash and cash equivalents
21,080,090 19,899,968 6,776,373 8,985,473
All of the above financial assets' carrying values are approximate to their
fair values, as at each reporting date disclosed.
Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Non current financial liabilities
2,342,222 1,456,025 2,342,222 1,456,025
Bank loans ‑ amortised cost
- 4,380,365 - 3,984,750
Deferred consideration ‑ held at fair value
2,342,222 5,836,390 2,342,222 5,440,775
Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Current financial liabilities at amortised cost unless otherwise stated
21,638,744 18,106,217 258,578 27,657
Trade payables
- - 10,564,144 9,569,537
Amounts owed to Group undertakings
4,250,515 - 3,855,000 -
Deferred consideration ‑ held at fair value
- 1,000,000 - 1,000,000
Deferred consideration ‑ amortised cost
533,997 429,321 1,350 1,350
Other payables
1,462,027 1,727,216 254,491 480,257
Accruals
5,155,132 4,389,016 - -
Invoice discounting facility
118,168 206,123 118,168 206,123
Bank loans ‑ current
33,158,583 25,857,893 15,051,731 11,284,924
All of the above financial liabilities' carrying values are considered by
management to be approximate to their fair values, as at each reporting date
disclosed.
25. Provisions
Group
Dilapidation provision
£
50,075
At 1 January 2023
(4,972)
Utilised during the year
At 31 December 2023
45,103
45,103
Due within one year or less
45,103
26. Financial instrument risk exposure and management
26.1 Financial risk management objectives
The Group's operations expose it to degrees of financial risk that include
liquidity risk, credit risk, interest rate risk, and foreign currency risk.
This note describes the Group's objectives, policies and process for managing
those risks and the methods used to measure them. Further quantitative
information in respect of these risks is presented in the notes above.
26.2 Foreign currency risk
Most of the Group's transactions are carried out in GBP. Exposures to foreign
currency exchange rates arise from the Group's overseas sales and purchases,
which are denominated in a number of currencies, primarily EUR and USD.
The Group assesses exposure and takes out forward currency contracts to
mitigate this foreign exchange risk. As at the 31 December 2023, the value of
forward contracts held by the subsidiary companies were as follows:
Likewise Floors Limited held forward Euro contracts totalling €615,576 (2022
‑ €1,191,033) and forward USD contracts totalling $3,975,491 (2022 ‑
$299,300).
These contracts crystallise between January and May 2024.
26.3 Interest rate risk
The Group has secured debt consisting of an invoice discounting facility and
bank loan.
The interest on the bank loan and discounting facility are at floating rates.
Interest rate risk is high due to the volatility experienced during 2023 and
the current economic climate of both the UK and worldwide economy.
Bank loan
The directors have performed a sensitivity analysis which shows the impact on
the loan for the coming year should the base rates rise a further 5% from
5.25% to 10.25% after the year end. This would result in a negative impact to
the cash‑flow over the coming 12 months of £0.1m. In this unlikely
scenario, management would look at the options available for refinancing.
Invoice discounting
The directors have performed a sensitivity analysis which shows the impact on
the invoice financing for the coming year should the base rates rise a further
5% from 5.25% to 10.25% after the year end. This would result in a negative
impact to cash‑flow over the coming 12 months of £0.3m. In this unlikely
scenario, management would look at reducing the amount of debtors financed or
other alternative methods of finance.
Forecasts are currently showing that interest rates should remain stable or
potentially fall as we move into Q2 of 2024.
The directors do not deem this to be a significant risk.
26.4 Credit risk
The Group's credit risk is primarily attributable to its cash balances and
trade receivables.
In respect of trade and other receivables, the Group is not exposed to any
significant credit risk exposure to any single counter party or any group of
counterparties having similar characteristics. Trade receivables consist of a
large number of customers in various industries and geographical areas. Based
on historical information about customer default rates management consider the
credit quality of trade receivables that are not past due or impaired to be
good.
The ageing profile of the trade receivables balance can be seen in note 19
above.
The Group's total credit risk amounts to the total of the sum of the
receivables and cash and cash equivalents. At the 2023 reporting date this
amounts to £21,080,090 (2022 ‑ £19,899,968).
26.5 Liquidity risk
Liquidity and interest risk tables
The following tables detail the Group's remaining contractual maturity for its
non‑derivative financial liabilities with agreed repayment periods. The
tables have been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Group can be required to
pay. The tables include both interest and principal cash flows. To the extent
that interest flows are floating rate, the undiscounted amount is derived from
interest rate curves at the end of the reporting period. The contractual
maturity is based on the earliest date on which the Group may be required to
pay.
Carrying amount Total 1 ‑ 3 months 3 ‑ 12 months 1 ‑ 2 years 2 ‑ 5 years More than 5 years
£ £ £ £ £ £ £
31 December 2023
Trade payables 21,638,744 21,638,744 21,638,744 - - - -
Other taxation and social security 1,880,688 1,880,688 1,880,688 - - - -
Other payables 533,997 533,997 533,997 - - - -
Accruals 1,462,027 1,462,027 1,462,027 - - - -
Lease liabilities 22,775,357 29,535,238 1,141,830 3,472,161 4,263,852 7,548,369 13,109,026
Invoice discounting facility 5,155,132 5,155,132 5,155,132 - - - -
Bank loans 2,460,390 4,076,204 92,641 208,442 277,923 833,769 2,663,429
Deferred consideration 4,250,515 4,250,515 4,250,515 - - - -
60,156,850 3,680,603 8,382,138 15,772,455
68,532,545 36,155,574 4,541,775
31 December 2022
Trade payables 18,106,217 18,106,217 18,106,217 - - - -
Other taxation and social security 1,707,672 1,707,672 1,707,672 - - - -
Other payables 429,321 429,321 429,321 - - - -
Accruals 1,727,216 1,727,216 1,727,216 - - - -
Lease liabilities 21,948,398 29,449,105 855,576 2,501,515 3,490,139 7,528,487 15,073,388
Invoice discounting facility 4,389,016 4,389,016 4,389,016 - - - -
Bank loans 1,662,148 2,293,057 53,013 159,037 212,050 636,150 1,232,807
Deferred consideration 5,380,365 5,380,565 1,000,000 - 4,380,565 - -
55,350,353 63,482,169 28,268,031 2,660,552 8,164,637
8,082,754 16,306,195
27. Capital management
The Group's capital management objectives are:
• To ensure the Group's ability to continue as a going concern; and
• To provide long term returns to shareholders.
The Group defines and monitors capital on the basis of the carrying amount of
equity plus its outstanding borrowings, less cash and cash equivalents as
presented on the face of the Consolidated Statement of Financial Position as
detailed below:
2023 2022
£ £
39,522,581 39,111,269
Equity
30,390,879 27,999,562
Borrowings
(5,709,229) (5,913,155)
Cash and cash equivalents
64,204,231 61,197,676
The board of directors monitors the level of capital as compared to the
Group's commitments and adjusts the level of capital as is determined to be
necessary by issuing new shares or adjusting the level of debt. The Group is
not subject to any externally imposed capital requirements.
28.
Share capital
Consolidated and Company
Authorised
2023 2023
Number £
Shares treated as equity
Ordinary shares of £0.01 each 243,964,480 2,439,645
243,964,480 2,439,645
Issued and fully paid
2023 2023
Number £
Ordinary shares of £0.01 each
At 1 January 243,835,980 2,438,360
Shares issued 128,500 1,285
At 31 December
243,964,480 2,439,645
The Company has one class of ordinary share which carry no right to fixed
income.
On 2 May 2023, the Company allotted 22,500 new £0.01 Ordinary Shares for
consideration of £0.10 per share, totalling £2,250. These shares were issued
under the Company's SAYE scheme.
On 8 September 2023, the Company allotted 106,000 new £0.01 Ordinary Shares
for consideration of £0.10 per share, totalling £10,600. These shares were
issued under the Company's SAYE scheme.
29. Share premium
2023 2022
£ £
17,384,625 22,458,816
Share premium at 1 January
11,565 17,447,908
Premium on shares issued in the year
- (522,099)
Share issue costs
- (22,000,000)
Reduction of share premium
Share premium at 31 December 17,396,190 17,384,625
See note 28 for details of shares issued in the year.
30. Reserves
Share capital
This represents the nominal value of shares that have been issued.
Share premium
This reflects proceeds generated on issue of shares in excess of their nominal
value and is a non‑distributable reserve.
Revaluation reserve
This is used to record increases in the fair value of fixed assets and
decreases to the extent that the decrease relates to a previous increase on
the same asset. The revaluation reserve is a non‑distributable reserve. The
excess depreciation on revalued assets in comparison to historical cost
depreciation is transferred from the revaluation reserve to retained earnings.
Foreign exchange reserve
This reflects the exchange differences on the translation of the foreign
subsidiary.
Retained earnings
This includes all current and prior period gains and losses.
Share option reserve
This represents the cumulative fair value of options granted.
Warrant reserve
This represents the cumulative fair value of warrants granted.
31. Warrants over ordinary shares
On 9 January 2019, the Company issued warrants over 1,800,000 shares as part
of the IPO at a price of £0.10 per share.
On 1 May 2019, the Company issued warrants over 1,000,000 shares as part of
the acquisition of H&V Carpets BVBA at a price of £0.30 per share. The
fair value of the warrants at the date of grant was considered to be
£128,170.
Warrants are exercisable at any date in the ten years following the date of
grant and none had been exercised as at 31 December 2023.
On 25 October 2023, the Company issued warrants over 100,000 shares to WH
Ireland Limited following their appointment as joint broker to the Group.
Warrants were issued at a price of £0.05 per warrant share and are
exercisable from 2 April 2024, up to the fifth anniversary from the date of
the warrant instrument agreement.
32. Analysis of amounts recognised in other comprehensive income
Note Revaluation reserve Foreign exchange reserve Retained earnings
£ £ £
Year to 31 December 2023
14 24,389 - -
Property revaluation
11 (6,097) - -
Deferred tax on property revaluation
- (7,015) -
Translation in relation to foreign subsidiary
(53,700) - 53,700
Transfer to/from retained earnings
(35,408) (7,015) 53,700
Note Revaluation reserve Foreign exchange reserve Retained earnings
£ £ £
Year to 31 December 2022
14 309,957 - -
Property revaluation
33 - - (5,000)
Actuarial losses on pension
- 16,138 -
Translation in relation to foreign subsidiary
(53,700) - 53,700
Transfer to/from retained earnings
256,257 16,138 48,700
33. Retirement plans
Defined contribution scheme
The Group operates a defined contribution pension scheme, the assets of which
are held separately from those of the Group in an independently administered
fund. Contributions made by the Group to the scheme during the year amounted
to £513,550 (2022 ‑ £500,267). The amount outstanding at the reporting
date in respect of contributions to the scheme were £98,970 (2022 ‑
£114,241).
(i) Defined benefit scheme characteristics and funding
Likewise Floors Limited, a subsidiary of the Group, operates a pension scheme
providing benefits based on final pensionable pay. The Scheme is closed to new
members and is closed to future accrual. For pensions earned after 5 April
1997 and for Guaranteed Minimum Pensions earned between 6 April 1998 and 5
April 1997, increases in payment will be in line with CPI rather than RPI.
Revaluations of pensions in deferment are linked to RPI.
The assets of the Scheme are held separately from those of the Group in
trustee‑administered funds. The level of contributions is determined by a
qualified actuary on the basis of triennial valuations. The liabilities have
been rolled forward based on data at 31 December 2020.
The contribution paid for the year ended 31 December 2023 was £Nil (2022 ‑
£5,000). The Group expects to contribute £Nil to the scheme in the coming
financial year.
Given that the defined benefit pension scheme is in surplus at 31 December
2023, there is expected to be no material impact on the Group's future cash
flows.
(ii) Reconciliation of defined benefit obligation and fair value of scheme
assets
All defined benefit schemes are exposed to materially the same risks and
therefore the reconciliation below is presented in aggregate.
Defined benefit obligation Fair value of scheme assets Effect of asset ceiling Net defined scheme liability
2023 2022 2023 2022 2023 2022 2023 2022
£ £ £ £ £ £ £ £
Balance at 1 January 1,266,000 1,731,000 (1,577,000) (1,928,000) 311,000 197,000 - -
Interest cost 58,000 32,000 (58,000) (32,000) - - - -
Included in profit or loss
1,324,000 1,763,000 (1,635,000) (1,960,000) 311,000 197,000 - -
Actuarial loss from:
‑ Demographic assumptions 5,000 (402,000) - - - - 5,000 (402,000)
‑ Limited by asset ceiling - - - - 13,000 114,000 13,000 114,000
Return on plan assets (excluding interest) - - (18,000) 293,000 - - (18,000) 293,000
Included in other comprehensive income
5,000 (402,000) (18,000) 293,000 13,000 114,000 - 5,000
Employer contributions - - - (5,000) - - - (5,000)
Benefits paid (98,000) (95,000) 98,000 95,000 - - - -
Other movements
(98,000) (95,000) 98,000 90,000 - - - (5,000)
Balance at 31 December
1,231,000 1,266,000 (1,555,000) (1,577,000) 324,000 311,000 - -
Composition of plan assets:
2023 2022
£ £
613,000 861,000
Equities / Property
191,000 76,000
Cash
751,000 640,000
Bonds
Total plan assets 1,555,000 1,577,000
Actuarial assumption
The principal actuarial assumptions used in the determining calculating the
present value of the defined benefit obligation (weighted average) include:
2023 2022
4.50 % 4.80 %
Discount rate
2.30 % 2.50 %
Future salary increases
3.00 % 3.30 %
Inflation assumption (RPI)
1.00 % 1.00 %
Mortality rates ‑ for male aged 65 now
1.00 % 1.00 %
Mortality rates ‑ for female aged 65 now
‑ Males 86.2 years
86.2 years
88.6 years
88.5 years
‑ Females
Longevity at retirement age (future pensioners)
87.3 years
87.2 years
‑ Males
89.7 years
89.7 years
‑ Females
Sensitivity analysis
Analysis of the sensitivity to the principal assumptions of the present value
of the defined benefit obligation was performed:
‑ A decrease in the interest rates of 0.5% would increase liabilities by
6.3%;
‑ A decrease in inflation of 0.5% would decrease the liabilities by 5.0%;
and
‑ An increase in the long term rate of mortality improvement of 0.5% would
increase the liabilities by 1.5%.
34. Share‑based payments
Equity settled share option plan
The Company has a Savings‑Related Share Option Plan ("SAYE") for all
employees of the Group. In accordance with the terms of the plan, as approved
by shareholders, employees of the Group may be granted options to purchase
ordinary shares. There are no performance criteria for the SAYE and options
are issued to participants in accordance with HMRC rules. Vesting is
conditional on continuity of service.
As at 31 December 2022, 8,140,830 share options remained active. During the
current year 4,462,181 new options were issued and 2,890,177 options lapsed on
employees leaving the Group. During the current year 128,500 options were
exercised with a weighted average option price of £0.10 per share. The
remaining contractual life of the remaining 9,584,334 options is approximately
2 years.
As at 31 December 2022, 11,350,000 share options remained active which were
issued under Enterprise Management Incentives (EMIs). During the current year
no new options were issued or exercised and 550,000 options lapsed on
employees leaving the Group. The remaining contractual life of the remaining
10,800,000 options is approximately 0.75 years.
As at 31 December 2022, 4,150,000 share options remained active which were
issued to management under a Company Share Option Plan (CSOP). During the
current year 1,100,000 new options were issued, no options were exercised and
350,000 options lapsed on employees leaving the Group. The remaining
contractual life of the remaining 4,900,000 options is approximately 2.75
years.
Share options are valued using the Black‑Scholes model. The inputs to the
model are the option price and share price at date of grant, expected
volatility (20%), expected dividend rate (0%) and risk free rate of return
(4%). The model has been adjusted for expected behavioural considerations.
The cost of options is amortised to the Statement of Comprehensive Income over
the service life of the option resulting in a charge of £274,841 for the year
(2022 ‑ £319,678).
35. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on consolidation and are
not disclosed in this note. Details of transactions between the Group and
other related parties are disclosed below.
A rent charge and early termination settlement of £78,179 was paid in the
prior year for leased office premises from a subsidiary of REI plc, a Company
controlled by the Group's non‑executive Chairman. Following the move of the
Group's head office to the Radial Park facility, no further fees are payable
in respect of the Group's previous head office.
36. Changes in liabilities arising from financing activities
Cash and cash equivalents Borrowing due within one year Borrowing due after one year Lease liabilities Total
£ £ £ £ £
At 31 December 2021 8,447,550 (2,498,234) (1,640,563) (12,170,539) (7,861,786)
Cash flows (2,534,395) - - - (2,534,395)
Repayment of bank loans - (67,432) 184,538 - 117,106
Increase in invoice discounting facility - (2,029,473) - - (2,029,473)
New /amended lease liabilities - - - (12,226,395) (12,226,395)
Repayment of lease liabilities - - - 2,448,536 2,448,536
At 31 December 2022
5,913,155 (4,595,139) (1,456,025) (21,948,398) (22,086,407)
At 31 December 2022 5,913,155 (4,595,139) (1,456,025) (21,948,398) (22,086,407)
Cash flows (203,925) - - - (203,925)
Repayment of bank loans - 206,123 1,620,678 - 1,826,801
New bank loan - (118,168) (2,376,832) - (2,495,000)
Interest accrued in period - - (130,043) (1,017,499) (1,147,542)
Increase in invoice discounting facility - (766,116) - - (766,116)
New / amended lease liabilities - - - (3,696,377) (3,696,377)
Repayment of lease liabilities - - - 3,886,917 3,886,917
At 31 December 2023
5,709,230 (5,273,300) (2,342,222) (22,775,357) (24,681,649)
Post balance sheet events
37.
During January 2024, the Company paid deferred consideration of £3,855,000 to
the former shareholders of Valley Wholesale Carpets (2004) Limited in
satisfaction of the acquisition agreement.
On 18 March 2024, the Company allotted 1,044,000 new £0.01 Ordinary Shares
for consideration of £0.10 per share, totalling £104,400. These shares were
issued under the Company's SAYE scheme.
On 3 April 2024, the Group paid deferred consideration of £414,500 to the
former shareholders of Delta Carpets (Holdings) Limited in satisfaction of the
acquisition agreement.
On 10 May 2024, the Company allotted 275,000 new £0.01 Ordinary Shares for
consideration of £0.10 per share, totalling £27,500. These shares were
issued under the Company's SAYE scheme.
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