REG - Brand Architekts Grp - Interim Results
21/03/2023 07:00
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RNS Number : 5708T Brand Architekts Group PLC 21 March 2023
Brand Architekts Group plc
("Brand Architekts" or the "Group")
Interim results
Brand Architekts Group plc, a market leader in the development and supply of
beauty and personal care brands, announces its interim results for the 6-month
period ended 31 December 2022
Business highlights:
· Business focussed on driving our solution-led Invest &
Nurture brands that can command higher retail prices, engender strong consumer
loyalty and deliver stronger margins.
· Initial stages of the InnovaDerma integration complete, core
functions now based in the UK.
· Skinny Tan launched into Sainsbury in September; new listings
confirmed in Boots in January 23, Superdrug in March 23 and new launch into
Waitrose for Spring 23.
· Launched New Super Facialist Clear Skin, targeting problematic
teenage skin care needs, on Amazon in September. Listing confirmed in Boots
for June 23.
· Planned launch of new Super Facialist D2C site in Spring 23,
benefitting from InnovaDerma D2C and digital communications expertise.
· 35% growth vs the prior year in International channel sales
driven by post covid rebound in volumes from General Merchandise stores across
North America and Europe, benefitting in particular Dirty Works.
· New distribution gains for Dirty Works in Ecuador and Guatemala
and new launches confirmed in 200 Watsons stores in Thailand and Vietnam in
June 23.
· Strong sell through of Dirty Works Christmas gift sets in
Sainsbury and to International customers.
Financial highlights:
· Revenues for the period of £10.6m, an increase of 45% on the
prior year (£7.4m) as a result of the acquisition of Innovaderma Plc at the
end of May 2022.
· Gross Profit Margin improved to 38.9% (H1 2022: 32.5%),
reflecting the impact of the Innovaderma brand portfolio.
· Underlying operating loss of £0.8m was in line with the prior
year (H1 2022: £0.8m). Excluding Innovaderma, underlying operating loss
improved by £0.3m to £0.5m from higher revenue and cost savings.
· Loss before tax increased by £0.7m to £1.8m (H1 2022: £1.1m)
owing to Innovaderma related exceptional costs and intangibles amortisation.
· Net cash position as at the period end was £8.1m.
H1 2023 H1 2022
Revenue (Note 2 of financial statements) £10.6m £7.4m
Underlying operation (loss)/profit1 £(0.8)m £(0.8)m
(Loss)/profit before taxation £(1.8)m £(1.1)m
Basic (loss)/earnings per share (Note 4 of financial statements) (6.1)p (7.7)p
Net cash £8.1m £17.3m
(1) Underlying operating (loss)/profit is calculated before exceptional items,
share-based payments and amortisation of acquisition-related intangibles.
Quentin Higham, Chief Executive, commented:
"Throughout the period we focused upon driving the strategic benefits of the
enlarged Group together with delivering the integration plan and simplifying
the organisational structure. We have secured new distribution gains against
our key Invest (Skinny Tan and Super Facialist) and Nurture (Dirty Works and
The Solution) brands, both online and offline, domestically and
Internationally. Our focus has been on implementing strategies that focus on
profitability, whilst capitalising on the Group's new online and digital
communications capabilities.
Despite facing a very challenging marketplace, with well documented headwinds
including inflation and reduction of consumer discretionary spend, we are
pleased that our results for the first half are in line with our expectations.
In the second half, as we enter the self-tanning season, we will look to
implement an awareness and customer acquisition program for Skinny Tan so as
to capitalise on its recent omnichannel distribution gains."
For further information please contact:
Brand Architekts Group
PLC
via Alma
Quentin Higham / Tom Carter
Singer Capital Markets (Nominated adviser and broker) 0207496 3000
Shaun Dobson / Jen Boorer
Alma PR 0203 405 0205
Josh Royston / Sam Modlin
CEO's Review
The trading environment throughout the last six months has continued to be challenging, with the ongoing impact of the wider macroeconomic and geopolitical issues having reduced consumer disposable income and therefore consumption rates. The business has focused on mitigating the impact of cost price inflation on its gross margins by increasing its selling prices and tight control of costs.
Post Covid we have seen consumers reverting back to high street shopping behaviour which reinforces the need for an omnichannel sales approach. I am pleased to see some positive momentum in our brand reach deliverables, in particular confirmed brand launches and distribution gains planned for 2023. We will continue to focus on securing additional omnichannel distribution gains within the UK and Internationally.
Given the dynamic nature of the beauty and personal care space, it is vital that we continue to innovate and we are excited by the NPD planned for FY24, notably exciting problem solving initiatives for Skinny Tan; Super Facialist; The Solution as well as the relaunch of Fish and Dirty Works. We will be applying a digital first mindset to all new brand and product initiatives, whilst ensuring that we either meet or exceed our corporate sustainability pledge.
Key achievements include:
· Skinny Tan launched into Sainsbury in September; new listings
confirmed in Boots in January 23, Superdrug in March and new launch into
Waitrose for Spring 23.
· Launched New Super Facialist Clear Skin, targeting problematic
teenage skin care needs, on Amazon in September, launch confirmed in Boots for
June 23.
· Planned launch of new Super Facialist D2C site in Spring 23,
benefitting from InnovaDerma D2C and digital communications expertise.
· 35% growth vs the prior year in International channel sales
driven by post covid rebound in volumes from General Merchandise stores across
North America and Europe, benefitting in particular Dirty Works.
· New distribution gains for Dirty Works in Ecuador and Guatemala
and new launches confirmed in 200 Watsons stores in Thailand and Vietnam in
June 23.
Performance review
Revenues for the period of £10.6m, an increase of 45% on the prior year
(£7.4m) as a result of the acquisition of Innovaderma Plc at the end of May
2022. Excluding Innovaderma, revenue improved by 4%, driven by strong
international sales that were partially offset by lower UK retail and DTC
trading. Gross Profit Margin improved to 38.9% (H1 2022: 32.5%), reflecting
the margin accretive impact of the Innovaderma brand portfolio.
Underlying operating loss of £0.8m was in line with the prior year (H1 2022:
£0.8m). Excluding Innovaderma, underlying operating loss improved by £0.3m
to £0.5m from higher revenue and cost savings. Loss before tax increased by
£0.7m to £1.8m (H1 2022: £1.1m) owing to exceptional costs relating to
integration restructuring activities and an increase in amortisation from
Innovaderma acquired intangibles.
Net cash position as at the period end was £8.1m, absorbing the operating
loss in the period, payment of accrued acquisition transaction and
restructuring costs and other working capital changes.
Progress made against the Group's new strategic pillars is outlined below:
1. Brand Development
The brand portfolio has now been split into 3 brand categories: Invest;
Nurture and Harvest.
Invest Brands are those that have an omnichannel distribution and either have,
or will have, their own DTC platform. Skinny Tan and Super Facialist have a
masstige positioning and provide existing scale, but also have significant
potential. Both brands are widely recognised within their respective
categories and reflect key consumer trends.
Nurture brands encompass those brands within the portfolio that have exciting
potential to broaden, from both a brand development and brand reach
perspective, such as Dirty Works. Alternatively, they could be
high-performance propositions, with a clear point of difference that answer
the specific needs of the consumer, such as The Solution and MR.
Whilst we undergo this business transition to focus on margin accretive
efficacious brands, it is important that we continue to manage a portfolio of
low investment Harvest Brands. These brands, such as Argan and Root Perfect
require minimal investment, competing on price and provide us with a stronger
category share of voice and credibility with key customers
The following strategic Brand Development tenets have been applied to our
Invest and Nurture brands:
· Profitability:
Profitability remains the number one priority. A&P investment is focused
only on the Invest and Nurture brands, thereby improving the profitability of
the Harvest portfolio. We have also reduced the size and use of secondary
packaging, which reduces impact on shelf but meets our sustainability pledge
(recent examples are Fish Root Boost powder and the Dirty Works Shower Puff
and Mitt products).
· NPD/Consumer Insights
In H1 we launched a Limited Edition Skinny Tan mouse in collaboration with the
breast cancer awareness charity CoppaFeel!. We launched the Super Facialist
Clear Skin sub brand (targeting problematic teen skin) onto Amazon as well as
two new Salicylic Acid products. We launched a Dr Salts+ 2kg Muscle Ease bath
salts, specifically for Amazon and Costco. In January 2023 we will launch
several exciting Skinny Tan extensions - Coconut Water; two Tanning Whips; an
Instant 1 Day Tanner; a Miracle Tan Eraser and two tanning brush accessories.
In the spring Skinny Tan will also launch an online exclusive 10-year
celebration tanning mouse and a Cherry Tanning Drop. We will relaunch the
Super Facialist for Men range and the MR Haircare brand, alongside some
channel exclusive brand extensions, such as Dirty Works Skincare in TJ Maxx
and three All Year Round Dirty Works gifts. NPD is an integral tenet to our
long-term success and we are excited by the plans in place for the future, in
particular with the 2024 launch of The Solution Menopause collection.
· Digital 1st
To successfully transition our business it is vital that we not only put
digital activity at the heart of our organisation, but that we drive our
awareness and reach through 360-degree integrated plans. The Innovaderma D2C
and social communications team is now fully integrated into the wider
organisation. The Skinny Tan community has over 1 Million followers across
channels and we are beginning to see improvements in Super Facialist's digital
metrics. The digital team continues to push boundaries and the UGC (user
generated content) programs have been extended across our key brands with
investments made in Skinny Tan's TikTok activity, including TikTok Live
Shopping and Creator (influencer) Affiliation activity.
· Advertising & promotions (A&P)
A&P is prioritised to support our Invest and Nurture brands, with the
objective of raising awareness; stimulating consumer trial and driving
distribution. Skinny Tan has the largest A&P budget that is now spent to
maximise omnichannel profitability. The appointment of a new PR agency for
Super Facialist has seen a positive impact on brand impressions across digital
and traditional press. The brand has appointed Charlotte Connolly as its
residential skincare expert and brand ambassador, who has already delivered
substantial coverage by providing educational content (i.e. video
demonstrations). This will also be used for the new website, which will
significantly improve the overall brand experience and drive brand
consideration across channels.
2. Brand Reach
Within the constraints of retailer range cycles, we have made some good
progress in securing new distribution domestically and Internationally.
· UK & International
In the UK, we launched the new Super Facialist Clear Skin range onto Amazon in
early H1 and Boots have confirmed that they will be launching the range and
The Solution Salicylic Body Gel into 271 stores in June 23. Skinny Tan
launched in Sainsbury in September and launched in Waitrose in February. From
January 23 we have listed all the Skinny Tan NPD into Boots; rolled out the
Tan & Tone Wonder Serum collection into Superdrug and have extended our
distribution of the brand in Boots and Asda.
The Solution launched into 100 new stores in Lily Drogerie in Serbia and in
January the brand will launch into 160 dm stores in Croatia, as well as a roll
out into Bosnia in March 23. Dirty Works launched in Guatemala in December and
launched into Ecuador in February. Watsons have confirmed that the brand will
be launching in over 200 stores in Thailand and Vietnam in June 23.
· D2C
The focus for spring 2023 is to further improve customer acquisition, improve
customer retention (through better loyalty mechanics and more targeted emails
using automation). Our UK CRM database has grown to 340k. An omnichannel
brand awareness campaign will start pre-peak season across all primarily
social channels (skewed towards younger audiences), as well as influencer
& PR initiatives. In addition, Skinny Tan's website will feature upgraded
technology and incorporate new brand assets. By the Spring Super Facialist
will has its own D2C site which will strengthen its omnichannel brand
experience.
In 2024 we will launch The Solution D2C site to coincide with the Menopause
range launch.
3. ESG
Our 2020 sustainability pledge states that all brands are 100% recyclable,
reusable and use bio-sourced plastic and packaging by 2025, we are currently
at 76%. Any brand relaunch or any new product development must incorporate PCR
and the sustainability of all raw materials are checked and verified. We now
have 14 brands that are Animal Test-free, which has been certified by PETA.
Outlook
Despite the challenging headwinds, we believe we are beginning to see the
benefits of the team's hard work over the past eighteen months, in particular
with regards to new distribution gains. Our attention will remain on
delivering our strategy and returning the Group to profitability.
Group Statement of Comprehensive Income
Period ended Period ended Year ended
31 Dec 2022 31 Dec 2021 30 June 2022
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Revenue 10,629 7,354 14,296
2
Cost of sales (6,493) (4,964) (9,506)
Gross profit 4,136 2,390 4,790
Commercial and administrative costs (5,526) (3,347) (6,880)
Operating loss before exceptional items (1,390) (957) (2,090)
Exceptional items (366) - (1,850)
Operating loss (1,756) (957) (3,940)
Finance income 21 1 20
Finance (42) (99) (196)
costs
3
Loss before taxation (1,777) (1,055) (4,116)
Taxation 91 (250) (130)
Loss after taxation (1,686) (1,305) (4,246)
Other comprehensive income/(loss) for the period:
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined benefit liability 655 122 5,143
Other comprehensive income/(loss) for the period 655 122 5,143
Total comprehensive (loss)/income for the period (1,031) (1,183) 897
(Loss)/profit attributable to:
Equity shareholders (1,718) (1,334) (4,322)
Non-controlling interests 32 29 76
Total comprehensive (loss)/income attributable to:
Equity shareholders (1,063) (1,212) 821
Non-controlling interests 32 29 76
(Loss)/earnings per share 4
- basic (6.1)p (7.7)p (23.9)p
- diluted (6.1)p (7.7)p (23.9)p
Group Statement of Financial Position
As at As at As at
31 Dec 2022 31 Dec 2021 30 June 2022
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment including
right-of-use assets 61 68 53
Intangible assets 18,327 10,161 18,870
Deferred tax assets 483 2,299 730
Total non-current assets 18,871 12,528 19,653
Current assets
Inventories 6,921 2,655 7,375
Trade and other receivables 5,833 5,080 5,099
Cash and cash equivalents 8,062 17,284 11,347
Current tax receivable - 432 -
Total current assets 20,816 25,451 23,821
Total assets 39,687 37,979 43,474
LIABILITIES
Current liabilities
Trade and other payables 5,164 4,786 6,844
Current tax payable 9 - 9
Total current liabilities 5,173 4,786 6,853
Non-current liabilities
Post-retirement benefit obligations 6 1,452 9,195 2,439
Deferred tax liabilities 2,309 1,459 2,428
Total non-current liabilities 3,761 10,654 4,867
Total liabilities 8,934 15,440 11,720
Net assets 30,753 22,539 31,754
EQUITY
Share capital 1,397 862 1,397
Share premium 11,987 11,987 11,987
Merger reserve 6,588 - 6,588
Pension remeasurement reserve (2,004) (7,680) (2,659)
Retained earnings 12,525 17,189 14,213
Total equity 30,493 22,358 31,526
Non-controlling interest 260 181 228
Total equity 30,753 22,539 31,754
Group Statement of Changes in Equity
Pension Non-controlling
Share Share Merger remeasurement Retained Total
capital premium reserve reserve earnings interest equity
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 30 June 2022 1,397 11,987 6,588 (2,659) 14,213 228 31,754
Non-controlling interest - - - - - 32 32
Share-based payments - - - - 30 - 30
Transactions with owners - - - - 30 32 62
Profit for the period - - - - (1,718) - (1,718)
Other comprehensive income:
Remeasurement of defined benefit liability
- - - 655 - - 655
Total comprehensive income for the period - - - 655 (1,718) - (1,063)
Balance as at 31 December 1,397 11,987 6,588 (2,004) 12,525 260 30,753
2022
Pension remeasurement Non-controlling
Share Share Merger Retained Total
capital premium reserve reserve earnings interest equity
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 30 June 2021 862 11,987 - (7,802) 18,496 152 23,695
Non-controlling interest - - - - - 29 29
Share-based payments - - - - 27 - 27
Transactions with owners - - - - 27 29 56
Profit for the period - - - - (1,334) - (1,334)
Other comprehensive income:
Remeasurement of defined benefit liability
- - - 122 - - 122
Total comprehensive income for the period - - - 122 (1,334) - (1,212)
Balance as at 31 December 862 11,987 - (7,680) 17,189 181 22,539
2021
Pension Non-
Share Share Merger remeasurement Retained controlling Total
capital premium reserve reserve earnings interest equity
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 30 June 2021 862 11,987 - (7,802) 18,496 152 23,695
Issue of new shares 535 - - - - - 535
Non-controlling interest - - - - - 76 76
Share-based payments - - - - 39 - 39
Transactions with owners 535 - 6,588 - 39 76 7,238
Loss for the year - - - - (4,322) - (4,322)
Other comprehensive income:
Remeasurement of defined benefit liability
- - - 5,143 - - 5,143
Total comprehensive income - - - 5,143 (4,322) - 821
for the year
Balance as at 30 June 2022 1,397 11,987 6,588 (2,659) 14,213 228 31,754
Group Cash Flow Statement
Period ended Period ended Year ended
31 Dec 2022 31 Dec 2021 30 June 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash flow from operating activities
(Loss)/profit after taxation (1,686) (1,305) (4,246)
Depreciation 7 13 29
Amortisation 574 187 388
Impairment of intangible assets and PPE - 936
Tax charge (91) 250 130
Finance income (21) (1) (20)
Finance cost 42 99 196
Decrease/(increase) in inventories 454 (356) (3,084)
(Increase)/decrease in trade and other receivables (734) (1,429) 101
(Decrease)/increase in trade and other payables (1,681) 2,185 641
Share-based payment expense 30 27 39
Contributions to defined benefit plan (159) (1,159) (1,318)
Cash (utilised in)/generated from operations (3,265) (1,489) (6,208)
Finance expense paid 3 (1) -
Taxation received - 432
Net cash flow from operating activities (3,262) (1,490) (5,776)
Cash flow from investing activities
Purchase of property, plant and equipment (13) (14) (15)
Purchase of intangibles (31) (231) (237)
Cash consideration paid for acquisitions - - (1,965)
Cash acquired on acquisition - - 1,510
Net cash flow from investing activities (44) (245) (707)
Cash flow from financing activities
Finance income received 21 1 20
Repayment of loans - - (1,208)
Net cash flow from financing activities 21 1 (1,188)
Net decrease in cash and cash equivalents (3,285) (1,734) (7,671)
Cash and cash equivalents at beginning of period 11,347 19,018 19,018
Cash and cash equivalents at end of period 8,062 17,284 11,347
Notes to the Interim financial statements
Note 1 Basis of preparation
The Group has prepared its interim results for the six-month period ended 31
December 2022 in accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS) as adopted by the UK and
also in accordance with the recognition and measurement principles of IFRS
issued by the International Accounting Standards Board.
The Directors have considered trading and cash flow forecasts prepared for the
Group, and based on these, and the confirmed banking facilities, are satisfied
that the Group will continue to be able to meet its liabilities as they fall
due for at least one year from the date of approval of the Interim Report. On
this basis, they consider it appropriate to adopt the going concern basis in
the preparation of these Interim financial statements.
These interim financial statements do not constitute full statutory accounts
within the meaning of section 434 of the Companies Act 2006 and are unaudited.
The unaudited interim financial statements were approved by the Board of
Directors on 20 March 2023.
The consolidated financial statements are prepared under the historical cost
convention. The accounting policies used in the interim financial statements
are consistent with IFRS and those which will be adopted in the preparation of
the Group's Annual Report and Financial Statements for the year ended 30 June
2023.
The statutory accounts for the year ended 30 June 2022, which were prepared
under IFRS, have been filed with the Registrar of Companies. These statutory
accounts carried an unqualified Auditors Report and did not contain a
statement under Section 498(2) or 498(3) of the Companies Act 2006.
The Group has not changed any of its accounting policies in the six months to
31 December 2022.
Note 2 Segmental analysis
The reportable segments of the Group were aggregated as follows:
- Brands - we leverage our skilled resources to develop and market a growing
portfolio of Brand Architekts Group owned and managed brands. These include
those organically developed plus the acquisitions of the portfolio of brands
included in the Brand Architekts acquisition (in 2016) and the Fish brand
acquired during 2018.
- InnovaDerma Brands - This segment includes those brands acquired as part of
the InnovaDerma business combination. The results of InnovaDerma brands are
currently reported separately from other brands to the directors.
- Eliminations and central costs - other group-wide activities and expenses,
including defined benefit pension costs, share-based payment
expenses/(credits), amortisation of acquisition-related intangibles, interest,
taxation and eliminations of inter-segment items, are presented within
"Eliminations and central costs".
IFRS 15 requires the disaggregation of revenue into categories that depict how
the nature, timing, amount and uncertainty of revenue and cash flows are
affected by economic factors. The directors have considered how the Group's
revenue might be disaggregated in order to meet the requirements of IFRS 15
and have concluded that the activity and geographical segmentation disclosures
set out below represent the most appropriate categories of disaggregation.
(a) Principal measures of profit and loss - Income Statement segmental information:
Period ended 31 December 2022
Period ended 31 December 2021
Eliminations
Eliminations
Brand Architekt Innova Derma and central and central Total
Brands Brands costs Total Brands costs
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK revenue 6,087 2,316 - 8,403 5,845 - 5,845
International revenue 1,595 631 - 2,226 1,509 - 1,509
Revenue - external 7,682 2,947 - 10,629 7,354 - 7,354
Revenue - internal - 126 (126) - - - -
Total revenue 7,682 3,051 (126) 10,629 7,354 - 7,354
Underlying operating (loss)/profit 117 (361) (603) (847) (208) (602) (810)
Charge for share-based payments (9) - (21) (30) (6) (21) (27)
Amortisation of acquisition-related intangibles - - (514) (514) - (120) (120)
Exceptional items (139) (138) (88) (365) - - -
Net borrowing costs - - (21) (21) - (98) (98)
(Loss)/profit before taxation (31) (499) (21) (1,777) (214) (841) (1,055)
Tax (charge)/credit - 8 83 91 - (250) (250)
(Loss)/profit for the period (31) (491) (1,164) (1,686) (214) (1,091) (1,305)
(b) Other Income Statement segmental information:
The following additional items are included in the measures of underlying
profit and loss reported to the CODM and are included within (a) above:
Period ended 31 December 2022
Brands Central costs Total
£'000 £'000 £'000
Depreciation 7 - 7
Amortisation - 574 574
Period ended 31 December 2021
Brands Central costs Total
£'000 £'000 £'000
Depreciation 13 - 13
Amortisation - 187 187
(c) Principal measures of assets and liabilities:
The Groups assets and liabilities are managed centrally by the CODM and
consequently there is no reconciliation between the Group's assets per the
Statement of Financial Position and the segment assets.
(d) Additional entity-wide disclosures:
The distribution of the Group's external revenue by destination is shown
below:
Geographical segments Period ended 31 Dec 2022 Period ended 31 Dec 2021 Year ended 30 June 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
UK 8,131 5,845 11,651
European Union countries 564 603 982
Rest of the World 1,934 906 1,663
10,629 7,354 14,296
In the period ended 31 December 2022, the Group had three customers that
exceeded 10% of total revenues, being 13.5%, 11.3% and 11.2% respectively. In
the period ended 31 December 2021, the Group had three customers that exceeded
10% of revenues, being 16.8%, 13.0% and 10.2% respectively.
Note 3 Finance costs
Period ended 31 Dec 2022 Period ended 31 Dec 2021 Year ended 30 June 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Bank loans and overdrafts (3) 1 -
Pension plan notional finance charge 45 98 196
42 99 196
Note 4 Earnings per share
Period ended 31 Dec 2022 Period ended 31 Dec 2021 Year ended 30 June 2022
(unaudited) (unaudited) (audited)
Basic and diluted
(Loss)/profit attributable to equity shareholders (£'000) (1,718) (1,334) (4,322)
Basic weighted average number of ordinary shares in issue during the period
27,943,180 17,230,702 18,111,180
Diluted number of shares 28,032,180 17,319,702 18,200,180
Basic (loss)/earnings per share (6.1)p (7.7)p (23.9)p
Diluted (loss)/earnings per share (6.1)p (7.7)p (23.9)p
Basic earnings/(loss) per share has been calculated by dividing the
profit/(loss) for each financial period by the weighted average number of
ordinary shares in issue in the period.
Note 5 Notes to Cash Flow Statement
(a) Reconciliation of cash and cash equivalents to movement in net cash:
Period ended Period ended Year ended
31 Dec 2022 31 Dec 2021 30 June 2022
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Decrease in cash and cash equivalents in the period (3,285) (1,734) (9,181)
Net cash outflow from decrease in borrowings - - 1,208
Change in net cash resulting from cash flows (3,285) (1,734) (7,973)
Net cash acquired on business combinations - - 302
Net cash at the beginning of the period 11,347 19,018 19,018
Net cash at the end of the period 8,062 17,284 11,347
(b) Analysis of net cash:
Closing 30 June 2022 Closing 31 Dec 2022
Cash flow
£'000 £'000 £'000
Cash at bank and in hand 11,347 (3,285) 8,062
Note 6 IAS 19 'Employee Benefits'
Expected future cash flows to and from the Group's defined benefit pension
scheme:
The Scheme is closed to new members and to further accruals of benefits. It is
subject to the scheme funding requirements outlined in UK legislation. The
last scheme funding valuation of the Plan was at 5 April 2020 and revealed a
deficit of £21,125,000. The deficit reduction payments were based on the
actuarial deficit including an allowance for the impact of changes in
financial market conditions up to 31 March 2021, which was £15,100,000. The
next triennial valuation of the Plan will take place on 5 April 2023.
The deficit reduction payment will be £318,000 per annum for three years to
2024, as well as an additional one- off payment of £1m in 2021, followed by
£791,000 per annum for a further 13 years to 2037.
In addition, the Company has agreed to meet the cost of administrative
expenses and Pension Protection Fund insurance premiums for the Scheme.
Anticipated payments by the Company in respect of plan administrative expenses
and the Pension Protection Fund premium in the year ending 30 June 2023 are
expected to be of a similar order of magnitude to payments in 2022.
Payments made by the Company to the Scheme and in respect of Scheme
liabilities were:
Period ended Period ended Year ended
31 Dec 2022 31 Dec 2021 30 June 2022
£'000 £'000 £'000
Deficit recovery payments 159 1,159 1,318
Scheme administrative expenses 67 63 118
Pension Protection Fund premium 113 112 112
Total 339 1,334 1,548
The amounts expensed in the Group Statement of Comprehensive Income were:
Period ended Period ended Year ended
31 Dec 2022 31 Dec 2021 30 June 2022
£'000 £'000 £'000
In operating profit:
Plan administrative expenses 67 53 118
Pension Protection Fund premium 54 63 112
121 116 230
In finance costs:
Unwinding of notional discount factor 45 98 196
Total 166 214 426
IAS 19 Employee benefits:
IAS 19 requires a separate valuation of the Scheme on a different basis to the
funding valuation referred to above. The key assumptions used were:
At 31 December 2022 At 31 December 2021 At 30 June 2022
Discount rate 4.65% 1.95% 3.85%
Inflation assumption (RPI) 3.30% 3.30% 3.10%
Inflation assumption (CPI) 2.90% 2.90% 2.75%
The amounts recognised in the Group Statement of Financial Position were:
At 31 December 2022 At 31 December 2021 At 30 June 2022
£'000 £'000 £'000
Present value of funded obligations (23,321) (37,102) (26,147)
Fair value of scheme assets 21,869 27,907 23,708
Deficit (1,452) (9,195) (2,439)
Note 7 Announcement of results
The Interim Report is available to members of the public at the Company's
Registered Office at 8 Waldegrave Road, Teddington, TW11 8GT and on the
Company's website.
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