REG - CEPS PLC - Final Results
29/05/2025 07:00
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RNS Number : 4808K CEPS PLC 29 May 2025
CEPS PLC
('CEPS' OR THE 'COMPANY' OR THE 'GROUP')
FINAL RESULTS
The Board of CEPS is pleased to announce its final results for the year ended
31 December 2024.
CHAIRMAN'S STATEMENT
I am delighted to present to shareholders the CEPS PLC final accounts for the
year ended 31 December 2024.
Macro overview
Since the EU Referendum in 2016 and especially in the last few years, each of
our financial years has been punctuated by extraordinary UK domestic events
and seemingly 'cataclysmic' world events that have absorbed the mainstream
media, filled newspaper column inches, occupied discussion programmes on
television and, of course, the ever burgeoning, active and provocative social
media.
The year we are reporting on has been no different. We have had the
continuation of the war between Russia and Ukraine, which has now been ongoing
for more than three years; discussions have recently commenced to try and draw
an end to this bloody and destructive conflict. Whilst Russia might well end
up retaining the territory it has taken, this relatively small increase in
land mass comes at a great cost in terms of Russian and Ukrainian life and
destruction of the Country's infrastructure. It is to be hoped that
discussions between Ukraine and Russia develop positively and that the
conflict comes to an end with a sustainable peace agreement.
The conflict between Israel and Hamas has led to increased political
volatility in the Middle East and voter polarisation within certain
constituencies in the recent UK General Election.
Over the course of 2024, we saw the expected further decline in inflation from
4% at the beginning of the year to a low of 1.7% in August; this was followed
by an uptick to 3.5% by the end of April 2025. The April inflation figure
contains a number of one-off policy driven changes, such as an increase in
water bills, energy bills (driven by the base effect of a 12% fall in prices
in April 2024) and air fares (reflecting the timing of Easter this year) as
opposed to fundamental increases driven by the UK economy. The Bank of
England is forecasting a rise to 3.7% by September this year followed by a
decline thereafter to 2%. Whilst the Bank of England had started to reduce
interest rates, having cut its base rate from 5.25% in four 0.25% reductions
to 4.25%, the European Central Bank, over the same period, has reduced its
rates from 4.5% to 2.25%. Domestic energy prices are projected to decline in
July 2025, raising hopes that the Bank of England will implement one or two
additional interest rate cuts over the remainder of the year, potentially
bringing the base rate down to 4% or lower. It is to be hoped that the
minority members of the Monetary Policy Committee who voted for a 0.5%
reduction at the last rate setting will hold more sway going forward.
Further cuts are important to CEPS as elevated rates have an impact on
consumer spending and the public's disposable income. With 'inflation
busting' pay rises and the significant increase of 28.5% in the National
Living Wage over the past three years, wages are now recovering some previous
losses and, with inflation expected to trend down to 2%, positive real wage
growth has re-emerged. Coupled with a gentle reduction in mortgage rates,
the pressure on most household budgets should start to ease in conjunction
with rate reductions.
The arrival of a new Labour Government on 5 July 2024 with a large majority
was fully anticipated after 14 years of Conservative rule. It was expected,
and hoped, that the new government would arrive in office with fully thought
through plans to create the conditions for economic growth, which had been a
major theme of the Labour manifesto. What has been disappointing to date has
been the apparent lack of any clear plan coupled with the introduction of a
series of measures which are unlikely to generate any growth or wealth, but
which have absorbed the Government's capacity, time and maybe even its limited
cash resources. The biggest direct impact for CEPS, in common with every
business in the UK, has been the changes to the National Living Wage and
National Insurance rates and thresholds, which the directors estimate will
increase Group costs by approximately £385,000 on an annual basis. Since
the Autumn Budget, most UK companies have developed plans to mitigate this
cost by a combination of a reduction in employment, a moderated increase in
wage rates for 2025 and further sales price increases.
The recent turmoil caused by the President of the United States through the
introduction of specific tariffs across the world, followed by a 90-day pause
with countries including China, has led to even further uncertainty. Given
the CEPS companies sell nothing to the USA, it is difficult to see any direct
negative consequences of these actions. In fact, it may be that the products
sourced in China by Aford Awards become cheaper because China's major market
has become more expensive to access, and manufacturers will seek new
markets. In addition, as almost all overseas buying is priced in USD, the
recent weakness in the USD against Sterling should also provide a positive
tailwind. However, all this turmoil and uncertainty could well lead to a
reduction in economic activity.
The latest GDP figures showing growth of 0.2% in March 2025 following an
increase of 0.5% in February should be viewed with caution, as they were
published before the full effects of the latest tariff farrago. The economy
has been growing, albeit modestly, across most sectors since the latter part
of 2023. From our experience of dealing largely with UK centric companies
there is a mood, outside of the mainstream media, that the UK 'is getting on
with getting on', and that companies are managing what is being presented to
them, continuing to drive cost savings, and investing and innovating to
produce productivity growth.
Records show that British households have had an elevated savings ratio since
the first lockdown for Covid in 2020. Households have increased their
savings, and these increases have coincided with cost-of-living pressures,
weak consumer confidence and slower growth in household consumption. It is
hoped that, as inflation falls and interest rates reduce, some of these funds
will be released to provide a boost to the UK economy.
Financial review and performance of the CEPS Group
Despite all these issues at the macro level, total CEPS revenue increased by
6.4% from £29.7m in 2023 to £31.6m in 2024. Gross profits also increased
by 6.4% from £12.5m to £13.3m over the same period. However, operating
profits declined marginally from £2.6m to £2.4m, a reduction of 5.1%. This
was largely due to an 8% increase in administration costs to support expansion
at ICA and Aford Awards, coupled with a heightened level of inflation over
this period. In addition, in 2023 there was an exceptional credit of
£137,000 included in Group net costs which reduced this figure to
£329,000. In 2024 Group net costs have returned to a more normal level of
£455,000. Earnings per share increased by 4.2% from 2.65p to 2.76p
The background to this modest increase in earnings per share is set out below
when we look at the financial performance of the underlying companies in more
detail.
Aford Awards
The market in which Aford Awards operates has had a tough year. Wholesale
distributors, a good barometer of market demand, have stated that the market
may have declined by as much as 20%. Consequently, in our view, the
performance by Aford Awards to produce a same again EBITDA for 2024 of
£556,000 is a creditable performance.
The company has invested in new production equipment and processes and has
expanded its product range; in so doing it is building a stronger, more
diversified and better controlled business. We noted that this was planned
in the last report, and are delighted to report that these new products are in
the market and are taking Aford Awards into new areas of business. It is
these developments that have helped bolster the year's financial performance.
A new warehouse has been secured locally to free up more space for the
production unit at Maidstone and to improve the efficiency of stock flow.
This extra space is essential to increase capacity and to improve efficiency
given the increase in orders and the intention to acquire other businesses to
relocate and absorb into the Maidstone facility.
A further small business, Millennium Awards trading as Online Trophies, was
acquired towards the end of the year and sales are currently exceeding
expectations. There are, as ever, further discussions ongoing with a few
other potential opportunities in an industry which continues to consolidate.
Sales in 2024 were £3.7m as compared to £3.5m in 2023. The associated
EBITDAs were £556,000 and £556,000 respectively.
Signature Fabrics, the holding company for Friedman's and Milano International
The two trading companies together had sales of £6.5m as compared to £6.8m
in 2023. The associated EBITDAs were £567,000 and £1.1m. Sales were down
by £200,000 in Friedman's and £100,000 in Milano.
Shareholders will be aware of some of the changes at Signature Fabrics during
the period. In the early part of the year, David Kaitiff, the founder of
Friedman's, informed CEPS of his wish to exit the business after 37 years.
Aware that this was likely to happen at some time, we had been encouraging the
strengthening and development of the management team. However, the impact of
Covid on the trading performance of both companies, and the need to return the
business back to its historic high level of profitability, was the primary
goal.
We also became aware of operational issues at Milano and so, not only have we
replaced David Kaitiff on a fulltime basis with an expanded team, but we have
also taken the opportunity to change the senior personnel at Milano. David
Kaitiff has been retained on a reduced remuneration basis to ensure that there
is full transfer of his knowledge and experience to the new team. One of the
principal issues has been that some of the traditional client base at
Friedman's, which had been serviced very successfully for many years, appeared
to collectively decide that the Covid experience was a step too far and
gradually closed their businesses.
The operational efficiency at Friedman's remains intact and all efforts are
being directed to expand the customer base and to return the gross margin to
its previous levels. This year, the gross margin fell below the historic
c.48% achieved in previous periods as a result of several one-off cost items,
mainly associated with the sourcing of fabric during a period of shortages and
elevated and fluctuating prices.
Milano has been significantly improved operationally since it was acquired at
the end of 2019. However, it is still not 'firing' on all cylinders.
Whilst it is early days, the new team has started well and we are optimistic
that the business will continue to improve and grow.
The transaction to buy out David Kaitiff's shareholding was announced at the
end of October 2024. A new company was established in the manner of the
CEPS' usual approach. CEPS increased its shareholding from 55% in the old
company to a directly held 67.5% of the new company. Helen Kaitiff with
22.5% directly held and a newly formed Signature Fabrics Employee Share
Ownership Trust with 10% intended to be issued to key employees, make up the
other shareholders. At 31 December 2024 the Trust had not yet granted
beneficial ownership to employees and the Group had effective control of 75%
of the company. In addition, CEPS received £2.1m of vendor loan stock.
ICA Group (formerly known as Hickton Group)
The newly named ICA Group has had another very strong year building on the
consolidation achieved in 2022 and the subsequent growth in 2023. Sales were
£21.4m in 2024 as compared to £19.4m in 2023. The associated EBITDAs were
£2.65m and £2.07m respectively.
Shareholders will have seen the announcement on 1 April 2025 by ICA which
covered several important matters. Firstly, it outlined an attractive
'bolt-on' acquisition of Align Building Control and Align Group (UK)
('Align'). Align fills a geographical gap in ICA's nationwide coverage and,
whilst the brand name will be retained, its operations will be absorbed into
the existing group. Align made a total of £356,000 unaudited profit before
tax for the year ended 31 December 2024. The acquisition was funded by a new
loan from ICA's existing banker, Santander.
At the same time, a modest share reconstruction was announced which
essentially locks in an equity share valuation of £12m for existing holders
and then, if and when ICA is sold in the future, the balance of the
consideration above £12m will be participated in by the existing shares and
by a new class of shares which will be held by the working directors and
certain senior employees. Essentially, this structure is the equivalent of
the introduction of a share option scheme. To summarise: up to a value for
the equity of £12m CEPS will receive 55.6% of the consideration and for the
portion above £12m CEPS will receive 50.7%.
Share capital
There was no share issuance in the current year and, therefore, the issued
share capital remains at 21,000,000 shares as it has since September 2021. The
balance sheet reconstruction was completed on 15 May 2024 as detailed in the
Interim Report 2024.
As we also stated in the Interim Report 2024, we have put in place the
necessary steps to introduce an Employee Share Ownership Trust which we expect
to be operational by the fourth quarter of this year.
Debt structure
The debt in CEPS, the parent company, has been reduced by the repayment of the
loan from David Horner, director of CEPS, of £192,000. The outstanding debt
now totals £4.95m and is made up of a £2.0m loan from a third party (with a
coupon of 9% and due to be repaid by 30 June 2026), and a loan from Chelverton
Asset Management Limited of £2.95m with a coupon of 5% which is repayable
with a notice period of 18 months.
Cash held by the Company at the financial year end was £212,000 (2023:
£185,000) and Group cash was £677,000 (2023: £916,000). Cash in CEPS at
the end of April 2025 was an elevated £793,000.
In CEPS we have external debt, as referred to above, of some £4.95m (2023:
£5.14m) and loan notes and loans owed by the three subsidiaries of some
£6.48m (2023: £4.49m).
Shareholder value creation
Continuing the approach from last year's Chairman's Statement, below is a
summary of the profit/value creation events:
1. Expected increase in the profits of the three subsidiaries
Very strong growth in the profitability of the biggest subsidiary ICA.
A solid performance in Aford Awards with a more positive outlook for 2025.
A disappointing performance in Signature Fabrics made up of Friedman's and
Milano. However, a change in the operational management team is expected to
make an improvement in 2025.
2. Self-funded 'bolt-on deals' in each of the three subsidiaries in
the manner that has occurred over the past five years
The acquisition made by Aford Awards of Millennium Awards trading as Online
Trophies, which completed on 11 November 2024, has already started to
contribute ahead of expectations.
The larger 'bolt-on' acquisition by ICA of Align Building Control and Align
Group (UK) will contribute to ICA for nine months in 2025.
3. Repayment of loan stocks from the subsidiaries, absent any
acquisitions, leading firstly to the repayment of the £2m third party loan
in 2025 and then, finally, the Chelverton Asset Management loan of £2.95m
In the year, an outstanding loan from myself of £192,000 was repaid.
The outstanding loan stock owed to the original owners of Milano International
of continued £100,000 was repaid.
4. Increase in CEPS' shareholdings in its subsidiary companies
The restructuring of the share capital of Signature Fabrics Holdings, the
holding company of Friedman's and Milano International, meant that CEPS has
increased its shareholding from 55% to a current 75% (which will reduce to
67.5% after the 10% held by the employee share ownership trust is allocated to
key members of the Signature Fabrics Holdings management team) and received an
additional £2.1m of loan stock.
The restructuring of the share capital of ICA means that if ICA were to be
sold at equity values up to £12m CEPS will receive 55.6% as opposed to its
previous 53.8%. To incentivise the working directors and senior management
team, for an equity consideration above £12m CEPS' share of the consideration
will reduce to 50.7%. The crossover valuation, for which CEPS' equity
holding is equal to its previous 53.8%, is £19.9m.
5. Share buy backs and cancellation
In the future as the small shareholders may wish to sell their shares with
CEPS acting as the buyer of last resort. This shrinking of the share capital
will, at the right price, and over time, prove to be very accretive to
earnings.
There were no share buy backs in the year. In the fourth quarter of 2025 we
expect that an employee share ownership trust will be put in place to effect
share purchases of small parcels of shares.
6. Offer to buy a subsidiary
As we grow the businesses, it is likely that we will be approached by larger
corporates and private equity funds to buy one or more of the subsidiaries.
This would likely be for a significant one-off gain.
Share price
In the Autumn budget the Chancellor, Rachel Reeves, changed the rates for
Inheritance Tax Relief on AIM traded shares from 0% to 20%. Whilst CEPS,
because of its small size, had not attracted the weight of money of some
larger AIM traded shares, it is clearly not helpful as a means of attracting
investors.
Outlook
Going forward in 2025 we are hopeful that the anticipated decline in inflation
during Q4 will lead to a steady, but regular, reduction in interest rates.
Historically, this type of environment has been very positive for small
company trading performance, confidence and ultimately share prices.
As mentioned in the introduction, things remain very uncertain across the
world; however, increasingly people are putting forward the view that the UK
is more stable than many other parts of the world. The Government has
another four years in power and enjoys a huge majority in Parliament. After
an unsteady first six months, it looks like the market is limiting the
Government's scope of action and, therefore, a period of stability and,
hopefully, gentle improvement is to be expected.
With the management teams in the subsidiaries focused on creating sales at
higher margins and driving further product development and efficient
production, supplemented by further 'bolt-on' acquisitions, we expect our
companies to outperform 2024. A long overdue period of stability will assist
them in their endeavours.
David Horner
Chairman
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
The directors of the Company accept responsibility for the content of this
announcement.
Enquiries
CEPS PLC
Vivien Langford, Group Finance Director +44 1225 483030
SPARK Advisory Partners Limited
Mark Brady / Jade Bayat +44 20 3368 3550
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2024
Audited Audited
2024 2023
£'000 £'000
Revenue 31,558 29,675
Cost of sales (18,268) (17,187)
Gross profit 13,290 12,488
Other operating income - 7
Exceptional income and expenses (37) 137
Administration expenses (10,837) (10,086)
Operating profit 2,416 2,546
Analysis of operating profit
Trading 2,871 2,875
Group net costs (455) (329)
2,416 2,546
Share of associate loss - -
Finance income 5 38
Finance costs (690) (793)
Profit before tax 1,731 1,791
Taxation (433) (567)
Profit for the financial year 1,298 1,224
Other comprehensive income:
Items that will not be reclassified to profit or loss
Actuarial gain on defined benefit pension plans - 13
Other comprehensive income for the year, net of tax - 13
Total comprehensive income for the financial year 1,298 1,237
Income attributable to:
Owners of the parent 580 556
Non-controlling interests 718 668
1,298 1,224
Total comprehensive income attributable to:
Owners of the parent 580 569
Non-controlling interests 718 668
1,298 1,237
Earnings per share
basic and diluted (pence) 2.76p 2.65p
All activity relates to continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Audited Audited
2024 2023
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 931 974
Right of use assets 1,760 2,025
Intangible assets 11,603 11,605
14,294 14,604
Current assets
Inventories 2,346 2,388
Trade and other receivables 4,484 4,837
Cash and cash equivalents 677 916
7,507 8,141
Total assets 21,801 22,745
Equity
Capital and reserves attributable to owners of the parent
Called up share capital 63 2,100
Share premium - 7,017
Retained earnings 2,754 (6,931)
2,817 2,186
Non-controlling interests in equity 2,149 3,407
Total equity 4,966 5,593
Liabilities
Non-current liabilities
Borrowings 5,278 6,889
Lease liabilities 1,436 1,721
Trade and other payables 68 60
Provisions 412 400
Deferred tax liability 312 372
7,506 9,442
Current liabilities
Borrowings 3,432 2,178
Lease liabilities 505 449
Trade and other payables 3,789 3,683
Current tax liabilities 1,603 1,400
9,329 7,710
Total liabilities 16,835 17,152
Total equity and liabilities 21,801 22,745
The comprehensive income within the parent company financial statements for
the year was a profit of £1,901,000 (2023: loss of £110,000).
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2024
Audited Audited
2024 2023
£'000 £'000
Cash flows from operating activities
Profit for the financial year 1,298 1,224
Adjustments for:
Depreciation and amortisation 902 821
(Profit)/loss on disposal of fixed assets (4) 21
Cash pension contributions less than administrative charge - 50
Net finance costs 685 755
Taxation charge 433 567
Changes in working capital:
Movement in inventories 42 (250)
Movement in trade and other receivables 353 (965)
Movement in trade and other payables 312 652
Movement in provisions 12 400
Cash generated from operations 4,033 3,275
Corporation tax paid (488) (450)
Net cash generated from operations 3,545 2,825
Cash flows from investing activities
Interest received 5 1
Acquisition of businesses and subsidiaries including deferred consideration (172) (320)
paid
Purchase of property, plant and equipment (142) (610)
Proceeds from sale of assets 51 70
Purchase of intangible assets (32) (80)
Purchase of loan notes in subsidiary from holder - (57)
Net cash used in investing activities (290) (996)
Cash flows from financing activities
Purchase of subsidiary shares from minority holders (790) (2)
Proceeds from borrowings - 502
Repayment of borrowings (1,425) (1,253)
Dividends paid to non-controlling interests (67) (157)
Interest paid (690) (889)
Lease liability payments (522) (398)
Net cash used in financing actives (3,494) (2,197)
Net decrease in cash and cash equivalents (239) (368)
Cash and cash equivalents at the beginning of the year 916 1,284
Cash and cash equivalents at the end of the year 677 916
Major non-cash movements. There were £293,000 of non-cash additions to
right-of-use assets and lease liabilities in the year (2023: £733,000 of
non-cash additions to right-of-use assets and lease liabilities). In
connection with the restructuring of the Signature Fabrics group of companies
£1,068,000 of loans were assumed by the minority shareholders (2023: none).
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2024
Share capital Share premium Retained earnings Attributable to owners of the parent Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 2,100 7,017 (7,526) 1,591 2,924 4,515
Actuarial gain - - 13 13 - 13
Profit for the year - - 556 556 668 1,224
Total comprehensive income for the financial year - - 569 569 668 1,237
Changes in ownership interest in subsidiaries 26 26 (27) (1)
Dividends paid in respect of non-controlling interests - - - - (158) (158)
At 31 December 2023 2,100 7,017 (6,931) 2,186 3,407 5,593
Profit for the year - - 580 580 718 1,298
Total comprehensive income for the financial year - - 580 580 718 1,298
Capital reduction in the year (2,037) (7,017) 9,054 - - -
Changes in ownership interest in subsidiaries 51 51 (1,909) (1,858)
Dividends paid in respect of non-controlling interests - - - - (67) (67)
At 31 December 2024 63 - 2,754 2,817 2,149 4,966
Share capital comprises the nominal value of shares subscribed for.
Share premium represents the amount above nominal value received for shares
issued, less transaction costs.
Retained earnings comprise accumulated comprehensive income for the current
year and prior periods attributable to the parent, less dividends paid.
Non-controlling interest represents the element of retained earnings which is
not attributable to the owners of the parent.
Notes to the financial information
1. General information
CEPS plc (the 'Company') is a company incorporated and domiciled in England
and Wales. The Company is a public company limited by shares, which is
admitted to trading on the AIM market of the London Stock Exchange. The
address of the registered office is 11 Laura Place, Bath BA2 4BL.
The principal activities of the Company are that of a holding company for
service and manufacturing companies, acquiring stakes in stable and steadily
growing entrepreneurial companies. Segmental analysis is given in note 4.
The financial statements are presented in British Pounds Sterling (£), the
currency of the primary economic environment in which the Group's activities
are operated and are reported in £'000. The financial statements are to the
year ended 31 December 2024 (2023: year ended 31 December 2023).
The registered number of the Company is 00507461.
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have
been consistently applied throughout the year, unless otherwise stated.
2. Basis of preparation and going concern
This announcement is an extract from the consolidated financial statements of
the Company for the year ended 31 December 2024 and comprises the Company and
its subsidiaries. The consolidated financial statements were authorised for
issue on 28 May 2025. The financial information set out below does not
constitute the Company's statutory accounts for the years ended 31 December
2023 or 2024 within the meaning of Section 434 of the Companies Act 2006, but
is derived from those accounts. Statutory accounts for 2023 have been
delivered to the Registrar of Companies and those for 2024 will be delivered
following the Company's Annual General Meeting. The auditor's reports on the
statutory accounts for the years ended 31 December 2023 and 31 December 2024
were unqualified and do not contain statements under s498(2) or (3) Companies
Act 2006.
These financial statements have been prepared on a going concern basis under
the historical cost convention in accordance with UK adopted International
Financial Reporting Standards ('IFRS'), IFRIC interpretations and the
Companies Act 2006 as applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared on a going concern
basis and under the historical cost convention. The Group's business
activities and financial position likely to affect its future development,
performance and position are set out in the front end of the report.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.
The Company has taken advantage of the exemption under the Companies Act 2006
not to present its own Statement of Comprehensive Income.
Going concern
The directors have considered the trading performance and financial position
of the Company and of the Group together with detailed forecasts for the
period to the end of 2026. The Aford Awards, Signature Fabrics and ICA Group
sub-groups service their bank and shareholder held debt from cash generated in
the trading subsidiaries which continue to trade profitably. The Group is
generating cash from operations with significant headroom in the applicable
banking covenants and mitigating actions could be taken to compensate for the
current inflationary pressures and a degree of fluctuation in the economy. The
Company had cash balances at 31 December 2024 and is receiving interest and
fees from the trading subsidiary groups. In addition, the Company has agreed a
12 month extension with the third party provider of the £2.0m loan such that
it is repayable on or before 30 June 2026.
After making enquiries, the directors have a reasonable expectation that the
Company and the Group have adequate resources to operate and to meet
liabilities for the foreseeable future. Accordingly, the going concern basis
of preparation continues to be adopted in the financial statements.
3. Critical accounting assumptions, judgements and estimates
The directors make estimates and assumptions concerning the future. They are
also required to exercise judgement in the process of applying the Company's
accounting policies. Estimates and judgements are continually evaluated and
are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances
The judgements, estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are assessed below:
a) Impairment of intangible assets (including goodwill)
The Group tests annually whether intangible assets
(including goodwill) have suffered any impairment, in accordance with the
accounting policy. The recoverable amounts of the cash-generating units have
been determined based on value-in-use calculations. The calculations require
the use of estimates (note 10).
b) Impairment of investments (including loans)
The Company assesses the impairment of investments whenever events or changes
in circumstances indicate that the carrying value may not be recoverable.
Factors considered important that could trigger an impairment review include a
significant underperformance of a trading subsidiary relative to historical or
projected future operating results and significant negative industry or
economic trends.
The assessment would include judgement over industry trends and forecasts
using estimates.
c) Leases
The directors have reviewed the asset lives and associated residual values of
all fixed asset classes and have concluded that Management utilise judgement
in respect of any option clauses in leases and whether such an option to
extend would be reasonably certain to be exercised. Management consider all
facts and circumstances including past practice, costs of alternatives and
future forecasts to determine the lease term. Management also apply
judgement and estimation in assessing the discount rate, which is based on the
incremental borrowing rate. These judgements impact on the lease term and
associated lease liabilities.
d) Recognition of revenue in respect of services
Revenue is recognised in the period in which the services are provided in
accordance with the stage of completion of the contract. This requires a
degree of estimation in respect of the stage of completion and time required
to complete the services, but is based on significant experience and data from
completed services.
e) Acquisitions
Fair values have been applied on the acquisition of businesses which involve a
degree of judgement and estimation, in particular in the identification and
evaluation of intangible assets including customer relationships. The values
recognised are derived from discounted cash flow forecasts and assumptions
based on experience and estimated factors relevant to the nature of the
business activity.
Where contingent consideration arises in respect of acquisitions, the best
estimate of further payments to be made is accrued. The actual trading results
may result in different amounts being payable and subsequent adjustments to
the deferred consideration.
f) Provisions
Dilapidations provisions are by their nature specific to individual
properties, can be open to interpretation of the lease terms and to a degree
of estimation in respect of the potential reinstatement costs. As a result,
the outcome of such claims can vary from the provisions made.
4. Segmental analysis
The Chief Operating Decision-Maker ('CODM') of the Group is its Board. Each
operating segment regularly reports its performance to the Board which, based
on those reports, allocates resources to and assesses the performance of those
operating segments.
The operating segments set out below are the only level for which discrete
information is available or utilised by the CODM.
Operating segments and their principal activities are as follows:
Aford Awards, an engraving and colour print company specialising in sports and
corporate awards;
Signature Fabrics, comprising Friedman's, a convertor and distributor of
specialist lycra, and Milano International (trading as Milano Pro-Sport), a
designer and manufacturer of leotards;
ICA Group, comprising Hickton Quality Control, Cook Brown, Morgan Lambert and
Qualitas Compliance, providers of services to the construction industry.
Group costs, assets and liabilities incurred at Head Office level to support
the activities of the Group.
The United Kingdom is the main country of operation from which the Group
derives its revenue and operating profit and is the principal location of the
assets and liabilities of the Group.
The Board assesses the performance of each operating segment by a measure of
adjusted earnings before interest, tax, Group costs, depreciation and
amortisation and, when applicable, exceptional costs (EBITDA). Other
information provided to the Board is measured in a manner consistent with that
in the financial statements.
i) Results by segment
Aford Signature ICA Total
Awards
Fabrics
Group
Group
2024 2024 2024 2024
£'000 £'000 £'000 £'000
Revenue 3,658 6,509 21,391 31,558
Expenses (3,102) (5,942) (18,746) (27,790)
Segmental result (EBITDA) 556 567 2,645 3,768
Depreciation and amortisation charge (1690) (219) (120) (498)
IFRS 16 depreciation (82) (167) (150) (399)
Group costs (455)
Net finance costs (including IFRS 16) (685)
Profit before taxation 1,731
Taxation (433)
Profit for the year 1,298
Aford Signature ICA Total
Awards
Fabrics
Group
Group
2023 2023 2023 2023
£'000 £'000 £'000 £'000
Revenue 3,476 6,826 19,373 29,675
Expenses (2,920) (5,759) (17,304) (25,983)
Segmental result (EBITDA) 556 1,067 2,069 3,692
Depreciation and amortisation charge (142) (208) (125) (475)
IFRS 16 depreciation (75) (168) (99) (342)
Group costs (329)
Net finance costs (including IFRS 16) (755)
Profit before taxation 1,791
Taxation (567)
Profit for the year 1,224
ii) Assets and liabilities by segment as at 31
December
Segment assets Segment liabilities Segment net assets/(liabilities)
2024 2023 2024 2023 2024 2023
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
CEPS Group 265 626 (5,436) (5,729) (5,171) (5,103)
Aford Awards 4,087 3,828 (1,858) (1,769) 2,229 2,059
Friedman's 7,016 7,872 (3,472) (2,709) 3,544 5,163
ICA Group 10,322 10,419 (5,958) (6,945) 4,364 3,474
Total - Group 21,690 22,745 (16,724) (17,152) 4,966 5,593
(iii) Revenue by geographical destination
2024 2023
£'000 £'000
UK 30,038 27,943
Europe 1,095 1,265
Rest of world 425 467
31,558 29,675
(iv) Nature of revenue
2024 2023
£'000 £'000
Products - recognised at a point in time 10,167 10,302
Services - recognised over time delivered 21,391 19,373
31,558 29,675
5. Taxation
2024 2023
£'000 £'000
Analysis of taxation in the year:
Current tax
Tax on profits of the year 508 410
Tax deducted at source on pension surplus - 134
Tax credit on additional pension costs (9) -
Tax in respect of prior years 28 (11)
Total current tax 527 533
Deferred tax
Current year deferred tax movement (59) 5
Tax in respect of prior years (35) 29
Total deferred tax (94) 34
Total tax charge 433 567
The tax assessed for the year is equal to (2023: higher than) the average
standard rate of corporation tax in the UK of 25% (2023: 23.5%).
Factors affecting current tax:
Profit before taxation 1,731 1,791
Profit multiplied by the standard rate of UK tax of 25% (2023: 23.5%) 433 421
Effects of:
Expenses not deductible 15 20
Additional capital allowances - (1)
Higher tax rate on pension credit - 8
Adjustments to tax in prior periods (7) 18
Adjustments to deferred tax rate - 2
Deferred tax not recognised (8) 99
Total tax charge 433 567
In May 2021 a change in rate to 25% from April 2023 was substantively enacted.
The rate of 25% is accordingly applied to UK deferred taxation balances at 31
December 2024 (2023: 25%).
There are tax losses carried forward in the Company of approximately £1.7m
(2023: £1.5m).
6. Earnings per share
Basic earnings per share is calculated on the profit for the year after
taxation attributable to the owners of the parent of £580,000 (2023:
£556,000) and on 21,000,000 (2023: 21,000,000) ordinary shares, being the
weighted number in issue during the year.
There are no potentially dilutive shares in the Group.
7. Property, plant and equipment
Freehold Leasehold Plant Motor Total
property property improvements And vehicles
machinery
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 - 487 873 21 1,381
Additions at cost 398 24 188 - 610
Disposals - - (143) (21) (164)
At 31 December 2023 398 511 918 - 1,827
Additions at cost - 1 135 6 142
Transfer from right of use assets - - 105 - 105
Disposals - - (94) - (94)
At 31 December 2024 398 512 1,064 6 1,980
Accumulated depreciation
At 1 January 2023 - 276 423 11 710
Charge for the year 8 46 161 1 216
Disposals - - (61) (12) (73)
At 31 December 2023 8 322 523 - 853
Charge for the year 8 42 150 1 201
Transfer from right of use assets - - 71 - 71
Disposals - - (76) - (76)
At 31 December 2024 16 364 668 1 1,049
Net book amount
At 31 December 2024 382 148 396 5 931
At 31 December 2023 390 189 395 - 974
8. Right-of-use assets
Leasehold Plant Motor Total
property And vehicles
machinery
£'000 £'000 £'000 £'000
Cost
At 1 January 2023 2,367 251 - 2,618
Additions at cost 284 252 197 733
Disposals at the end of the lease term (230) (11) - (241)
At 31 December 2023 2,421 492 197 3,110
Additions at cost 98 156 39 293
Transfer to owned fixed assets - (105) - (105)
Disposals at the end of the lease term (80) (33) - (113)
At 31 December 2024 2,439 510 236 3,185
Accumulated depreciation
At 1 January 2023 814 110 - 924
Charge for the year 314 79 9 402
Disposals at the end of the lease term (230) (11) - (241)
At 31 December 2023 898 178 9 1,085
Charge for the year 330 106 59 495
Transfer to owned fixed assets - (71) - (71)
Disposals at the end of the lease term (80) (4) - (84)
At 31 December 2024 1,148 209 68 1,425
Net book amount
At 31 December 2024 1,291 301 168 1,760
At 31 December 2023 1,523 314 188 2,025
At the year end, assets held under hire purchase contracts and capitalised as
plant and machinery right-of-use assets have a net book value of £330,000
(2023: £318,000).
The depreciation of £96,000 (2023: £60,000) in respect of these has been
charged to cost of sales in the Consolidated Statement of Comprehensive
Income.
9. Business combinations
Acquisition in 2024 of Millennium Awards Limited trading as Online Trophies
On 11 November 2024, a subsidiary, Aford Awards Limited, acquired the trade
and customer lists of Millennium Awards Limited trading as Online Trophies.
This supplies trophies, awards and medals.
This acquisition of a business has been accounted for using the acquisition
method of accounting. Fair value adjustments were made in respect of customer
relationships amounting to all of the consideration of £138,000, together
with a related deferred tax liability of £34,000, resulting in goodwill of
£34,000.
The following table shows the fair value of assets and liabilities included in
the consolidated statements at the date of acquisition:
Fair value
£'000
Identifiable assets and liabilities
Intangible assets 138
Deferred taxation (34)
104
Goodwill 34
138
Consideration
Cash consideration paid at completion 35
Deferred consideration 103
138
The cash outflow at the date of acquisition was £35,000 with forecast
deferred contingent consideration payable of £103,000 contingent on sales
over the five years following the acquisition. Deferred consideration is
included in other payables.
The business contributed £11,000 of revenue for the two months in 2024 after
the acquisition date. It is integrated into the overall Aford Awards business
and generates similar margins. If it had been included from 1 January 2024,
Group revenue would have been £130,000 higher and operating profit
approximately £50,000 higher.
£137,000 of deferred consideration was also paid in 2024 (2023: £320,000) in
respect of businesses acquired in earlier periods.
10. Intangible assets
Goodwill Customer relationship assets Website Software, licences and website assets Total
assets
£'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 10,942 981 190 622 12,545
Additions at cost - - - 80 80
At 31 December 2023 10,942 981 190 702 12,625
On acquisition 34 138 - - 172
Additions at cost - - - 32 32
At 31 December 2024 10,976 1,119 190 734 12,829
Accumulated amortisation and impairment
At 1 January 2023 172 356 27 289 817
Amortisation charge - 124 38 79 203
At 31 December 2023 172 480 65 368 1,020
Amortisation charge - 128 38 78 206
At 31 December 2024 172 608 103 446 1,226
Net book amount
At 31 December 2024 10,804 511 87 288 11,603
At 31 December 2023 10,770 501 125 334 11,605
Goodwill is not amortised under IFRS, but is subject to impairment testing.
Any impairment charges are included in administration expenses and disclosed
as an exceptional cost.
Customer relationship related assets and other intangibles in respect of
computer software, website costs and licences are amortised over their
estimated economic lives. The annual amortisation charge is expensed to cost
of sales in the Consolidated Statement of Comprehensive Income.
Impairment tests for goodwill
The Group tests goodwill arising on the acquisition of a subsidiary annually
for impairment or more frequently if there are indications that goodwill may
be impaired.
For the purpose of impairment testing, goodwill is allocated to the Group's
cash generating units (CGUs) on a business segment basis:
Aford Signature ICA Total
Awards
Fabrics Group
£'000 £'000 £'000 £'000
Goodwill
At 31 December 2024 1,872 3,167 5,765 10,804
At 31 December 2023 1,838 3,167 5,765 10,770
The recoverable amount of each CGU is based on value-in-use calculations.
These calculations use cash flow projections based on financial budgets
approved by management covering a five-year period. Cash flows beyond five
years are assumed to increase only by a long-term growth rate of 1.5%. A
discount rate of 13.7% (2023: 13.4%), representing the estimated pre-tax cost
of capital, has been applied to these projections for all three CGUs.
Management has determined the budgeted revenue growth and gross margins based
on past performance and their expectations of market developments in the
future. Long-term growth rates are based on the lower of the UK long-term
growth rate and management's general expectations for the relevant CGU.
In respect of all three CGUs, the value-in-use calculation gives rise to
sufficient headroom such that reasonable changes in the key assumptions do not
eliminate the headroom
11. Share capital and share premium
Number of shares Ordinary £0.10 shares Share premium Total
£'000 £'000 £'000
At 31 December 2023 21,000,000 2,100 7,017 9,117
Capital reduction (2,037) (7,017) (9,054)
At 31 December 2024 21,000,000 63 - 63
In March 2024, a special resolution was passed to reduce the nominal value of
each share from 10 pence to 0.3 pence and to cancel the share premium
resulting in a total nominal value of £63,000, no share premium and with an
amount of £9,054,000 transferred to retained earnings.
12. Related Party Transactions
During the year the Company entered into the following transactions with its
subsidiaries.
Aford Awards Group Holdings Limited Signature Fabrics Holdings Limited and subsidiaries ICA Group Limited subsidiaries
£'000 £'000 £'000
Loan interest receivable
- 2024 76 85 184
- 2023 76 56 193
Management charge income receivable
- 2024 20 35 25
- 2023 20 35 25
Dividends received
- 2024 - 83 -
- 2023 - 193 -
Amount owed to the Company
- 31 December 2024 1,235 3,384 1,864
- 31 December 2023 1,254 816 2,439
The Company is under the control of its shareholders and not any one
individual party.
The restructuring of the Signature Fabrics group with a new intermediate
holding company, Signature Fabrics Holdings Limited, used to acquire Signature
Fabrics Limited, resulted in £2,132,500 of loan notes being issued to the
Company, increasing the amounts receivable from this sub group. As part of the
transaction D and H Kaitiff, directors of Signature Fabrics Limited, reduced
their shareholdings from a combined 45% to 25% and received the new loan notes
of £390,000 and £577,500 shown below. D Kaitiff also received £710,000 in
cash for his shares and was owed a further £100,000, left as an interest-free
short term loan at 31 December 2024. H Kaitiff continues to have director
responsibilities, but D Kaitiff has none.
At the year end the parent company owed a loan of £2,950,000 (2023:
£2,950,000) and accrued interest of £nil (2023: £nil) to an entity with
common shareholders and interest of £148,000 (2023: £148,000) was charged on
this loan during the year. The loan is guaranteed by D A Horner, Chairman.
At the year end the Company owed £2,000,000 to a third party (2023:
£2,000,000). Interest of £140,000 (2023: £140,000) was charged on the third
party loan during the year. The loan is guaranteed by D A Horner, Chairman.
At the year end the Company owed £nil (2023: £192,000) to a director, D A
Horner, Chairman. The loan was unsecured, interest free and repaid in 2024.
At the year end amounts owed to directors of subsidiary companies and their
close family members in respect of acquisition loan notes amounted to
£2,386,000 (2023: £1,720,000). Interest payable on these loans in the year
amounted to £144,000 (2023: £127,000).
At the year end amounts owed to directors of subsidiary companies in relation
to loans amounted to £240,000 (2023: £140,000). Interest paid on these loans
in the year amounted to £7,000 (2023: £7,000).
These amounts are analysed below:
At 31 December 2024 Amount Interest Interest
Related party Company Position £'000 £'000 %
R Ferguson Aford Awards Group Holdings Limited Director 62 4 7
R Ferguson Aford Awards Limited Director 90 5 5
P Wood Aford Awards Group Holdings Limited Director 63 4 7
P Wood Aford Awards Limited Director 50 3 5
J Ford Aford Awards Group Holdings Limited Former Director 90 7 8
D Kaitiff Signature Fabrics Holdings Limited Former Director 390 5 8
D Kaitiff Signature Fabrics Holdings Limited Former Director 100 - -
H Kaitiff Signature Fabrics Holdings Limited Director 578 8 8
M Brown ICA Group Limited Director 328 33 8
J Cook ICA Group Limited Director 451 42 8
A Mobbs ICA Group Limited Former Director 223 22 8
J Pryke ICA Group Limited Director 201 18 8
2,626 151
At 31 December 2023 Amount Interest Interest
Related party Company Position £'000 £'000 %
R Ferguson Aford Awards Group Holdings Limited Director 62 4 7
R Ferguson Aford Awards Limited Director 90 5 5
P Wood Aford Awards Group Holdings Limited Director 63 4 7
P Wood Aford Awards Limited Director 50 3 5
J Ford Aford Awards (Holdings) Limited Former Director 90 7 8
M Brown ICA Group Limited Director 437 35 8
M Brown ICA Group Limited Director - 3 5
J Cook ICA Group Limited Director 560 40 8
J Cook ICA Group Limited Director - 3 5
A Mobbs ICA Group Limited Former Director 298 24 8
J Pryke ICA Group Limited Director 210 12 8
1,860 140
13. Post balance sheet events
On 1 April 2025, the Company's subsidiary, ICA Group Limited, acquired Align
Building Control Limited and Align Group (UK) Limited for a total
consideration of £1.3m, of which £0.9m was paid at completion. The book net
assets acquired were approximately £0.9m but the Group has not yet completed
the acquisition accounting and identification of any intangible assets other
than the goodwill. A new £2.5m bank loan was drawn down to assist in
financing this acquisition, to fund £375,000 for a buy back being made of
3.1% of ICA Group Limited's share capital and to fund overall investment
plans. The new bank loan is repayable quarterly over four years.
On 1 April 2025, ICA Group Limited also issued 25,900 B £0.01 ordinary shares
at par to incentivise key employees. The B £0.01 shares only share in the
capital value of ICA Group Limited to the extent it grows from the 1 April
2025 value.
On 9 May 2025 a 12 month extension was agreed with the third party provider of
the £2.0m loan. The loan is repayable on or before 30 June 2026 and the
interest rate has increased from 7% per annum to 9% per annum with effect from
15 May 2025. All other terms of the loan remain the same.
14. Distribution of the Annual Report and Notice of AGM
A copy of the 2024 Annual Report, together with a notice of the Company's
Annual General Meeting ('AGM') to be held at 11:30am on Monday 23 June 2025 at
11 Laura Place, Bath BA2 4BL, will be sent to all shareholders on Friday 30
May 2025, Further copies will be available to the public from the Company
Secretary at the Company's registered address at 11 Laura Place, Bath BA2 4BL
and from the Group website, www.cepsplc.com (http://www.cepsplc.com) .
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. END FR UWVVRVNUVUARRecent news on Ceps
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