REG - Creightons PLC - Final Results <Origin Href="QuoteRef">CRGT.L</Origin> - Part 2
28/06/2016 08:20
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instruments,
which is recognised over the remainder of the original vesting period.
2. Financial instruments and treasury risk management
Exposures to credit, interest and currency risks arise in the normal course of
the Group's business. Risk management policies and hedging activities are
outlined below.
Credit risk
Trading exposures are monitored by the operational companies against agreed
policy levels. Credit insurance is employed where it is considered to be cost
effective. Non-trading financial exposures are incurred only with the Group's
bankers or other institutions with prior approval of the Board of directors.
The majority of trade receivables in the UK and North America are with retail
customers. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset in the balance sheet.
Impairment provisions on trade receivables have been disclosed in note 20 to
the financial statements.
Price risk
The Group considers that there is minimal price in the current economic
climate.
Interest rate risk
The Group finances its operations through a mixture of debt associated with
working capital facilities and equity. The Group is exposed to changes in
interest rates on its floating rate working capital facilities. The
variability and scale of these facilities is such that the Group does not
consider it cost effective to hedge against this risk.
Interest rate sensitivity
The interest rate sensitivity is based upon the Group's weighted average
borrowings over the year assuming a 1% increase or decrease which is used when
reporting interest rate risk internally to key management personnel.
If interest rates had been 1% higher/lower and all other variables were held
constant, the Group's profit for the year ended 31 March 2016 would
increase/decrease by £1,000 (2015 - £6,000). The Group's sensitivity to
interest rates has decreased during the current year mainly due to the
decrease in the average working capital facilities used in the year.
Foreign currency risks
The Group is exposed to foreign currency transaction and translation risks.
Transaction risk arises on income and expenditure in currencies other than the
functional currency of each group company. The magnitude of this risk is
relatively low as the majority of the Group's income and expenditure are
denominated in the functional currency. Approximately 8% (2015 - 9%) of the
Group's income is denominated in US dollars and 2% (2015 - 1%) in Euros.
Approximately 2% (2015 - 4%) of the Group's expenditure is denominated in US
dollars and 4% (2015 - 4%) in Euros.
Foreign currency sensitivity
A 5% strengthening of sterling would result in a £40,000 (2015 - £34,000)
reduction in profits and equity. A 5% weakening in sterling would result in a
£45,000 (2015 - £37,000) increase in profits and equity.
When appropriate the Group utilises currency derivatives to hedge against
significant future transactions and cash flows. The Group is party to foreign
currency forward contracts in the management of its exchange risk exposure at
31 March 2016. The instruments purchased are in the currency used by the
Group's principal overseas suppliers.
The Group designates its foreign currency forward exchange contracts as
hedging instruments as they qualify for hedge accounting under IAS39. The
Group is party to foreign currency forward contracts in the management of its
exchange risk exposure; they are not held for speculative purposes. The
instruments purchased are in the currencies used by the Group's overseas
customers and suppliers.
Current assets
Group Company
2016 2015 2016 2015
£000 £000 £000 £000
Derivatives that are designated and effective as hedging instruments carried at fair value
Forward foreign currency contracts 25 17 - -
25 17 - -
-
Current liabilities
Group Company
2016 2015 2016 2015
£000 £000 £000 £000
Financial assets carried at fair value through the profit or loss
Forward foreign currency contracts 51 13 - -
51 13 - -
-
The Group has entered into forward exchange contracts (for terms not exceeding
12 months) to hedge the exchange rate risk arising from commitments to
purchase raw materials denominated in Euros and to sell in US dollars, which
are designated as cash flow hedges.
Cash flow and liquidity risk
The Group has no long term borrowing requirements and manages its working
capital requirements through overdrafts and invoice finance facilities. These
facilities are due to be renewed in March 2017. The maturity profile of the
committed bank facilities is reviewed regularly and such facilities are
extended or replaced well in advance of their expiry. The Group has complied
with all of the terms of these facilities. At 31 March 2016 the group had
available £3,142,000 (2015 - £3,166,000) of undrawn committed borrowing
facilities in respect of which all conditions precedent had been met. The
directors do not consider that a more detailed maturity analysis is
necessary.
3. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Year ended 31 March Year ended31 March
2016 2015
£000 £000
Earnings
Net profit attributable to the equity holders of the parent company 1,329 851
Year ended 31 March Year ended31 March
2016 2015
Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share 59,649,743 59,537,243
Effect of dilutive potential ordinary shares relating to share options 7,005,000 7,405,000
Weighted average number of ordinary shares for the purposes of diluted earnings per share 66,654,743 66,942,243
Earnings per share
Basic 2.23p 1.43p
Diluted 1.99p 1.27p
1.27p
Earnings per share before exceptional item
Basic 0.94p 0.80p
Diluted 0.84p 0.71p
0.71p
4. Share capital
Ordinary shares of 1p each
£000 Number
At 1 April 2014 584 58,355,426
Issued in the year 12 1,181,817
At 31 March 2015 596 59,537,243
Issued in the year 3 300,000
At 31 March 2016 599 59,837,243
599
59,837,243
The company has one class of ordinary shares which carry no right to fixed
income. All of the share are issued and fully paid. The total proceeds from
the issue of shares in the year was £4,000 (2015 - Nil).
5. Notes to consolidated cash flow statement
Year ended 31 March 2016 Year ended 31 March 2015
Continuing operations Discontinued operations Total Group Continuing operations Discontinued operations Total Group
£000 £000 £000 £000 £000 £000
Profit from operations 558 - 558 502 (4) 498
Adjustments for:
Depreciation on property, plant and equipment 196 - 196 175 - 175
Amortisation of intangible assets 345 - 345 334 - 334
Profit / loss on exceptionals 2 (232) (230) - - -
Revaluation of assets acquired from administrators of Broadoak Toiletries (227) - (227) - - -
Share based payment charge 40 - 40 14 - 14
914 (232) 682 1,025 (4) 1,021
Decrease / (Increase) in inventories 2 160 162 (384) 14 (370)
Increase in trade and other receivables (457) - (457) (127) - (127)
Increase in trade and other payables 587 - 587 179 - 179
Movement in non-cash derivatives 5 - 5 (4) - (4)
Cash generated from operations 1,051 (72) 979 689 10 699
Interest received / (paid) 1 - 1 (22) - (22)
Net cash from operating activities 1,052 (72) 980 667 10 677
677
Cash and cash equivalents (which are presented as a single asset on the face
of the balance sheet) comprise cash at bank and in hand.
6. Discontinued operations
During the year the Group completed the sale of the business and assets of The
Real Shaving Company brand including the trademark and associated intellectual
property, its principal activities were to design, manufacture and distribute
the male grooming brand.
The disposal was completed on 28 May 2015 and was carried out as the Board
believed the Group had developed The Real Shaving Company business to a point
where it had established presence in a number of key retailers in the UK and
certain overseas markets but that it believed significant investment in the
Brand was required to generate further sales growth, particularly in the
current challenging retail market.
7. Other operating income
Note Year ended31 March Year ended31 March
2016 2015
£000 £000
Gain on Bargain Purchase 6 227 -
Total 227 -
8. Business combinations
On 16 February 2016 Potter and Moore (Devon) Limited, a subsidiary of
Creightons PLC, acquired some of the assets of Broad Oak Toiletries Limited
from the administrator for a consideration of £600,002, consisting of cash of
£600,002. There was no consideration in the form of shares.
The Group decided to acquire the assets of Broad Oak Toiletries Limited for
the purpose of expansion into a new premium sector of contract manufacturing
which complements the company's existing production capabilities which we are
confident will add to both the company's sales and profits by enabling us to
produce and supply new product ranges such as Soap, Candles and Powder
products to an enlarged customer base who will benefit from our superior
supply chain management,"
The net assets of the assets acquired during the year, as extracted from the
seller's accounting records, and the fair value adjustments ascribed thereto,
are set out below:
Group
Consideration paid Fair value alignments Accounting policy alignments Fair values acquired
£000 £000 £000 £000
Plant and equipment 540 227 - 767
Intellectual property 10 - - 10
Inventories 50 - - 50
Total fair value of net assets acquired 827
Gain on bargain purchase (227)
Total consideration 600
Total consideration comprises:Cash 600
The gain on the bargain purchase of £227,000 has been recognised in other
operating income, see note 7. The gain resulted from the external revaluation
of plant and equipment to market values.
In the period following acquisition, Potter and Moore (Devon) Limited has
contributed £262,000 to the Group's revenue and £51,000 to the Group's profit
which has been included within the consolidated statement of comprehensive
income for the year.
Acquisition related costs of £225,000 have been recognised within
administrative expenses in the statement of comprehensive income that relate
to provisions for reorganisation costs, professional, legal and valuation
services associated with the business combination.
9. Status of information
In accordance with section 435 of the Companies Act 2006, the Directors advise
that the financial information set out in this announcement does not
constitute the Group's statutory financial statements for the year ended 31
March 2016 or 2015, but is derived from these financial statements. The
financial statements for the year ended 31 March 2015 have been delivered to
the Registrar of Companies. The financial statements for the year ended 31
March 2016 have been prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The financial statements
for the year ended 31 March 2016 will be forwarded to the Registrar of
Companies following the Company's Annual General Meeting. The Auditors have
reported on these financial statements; their reports were unqualified and did
not contain statements under Section 498(2) or (3) of the Companies Act 2006.
The consolidated statement of financial position at 31 March 2016 and the
consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then
ended have been extracted from the Group's financial statements. Those
financial statements have not yet been delivered to the Registrar.
The full report and accounts are expected to be posted to Shareholders
shortly. The annual report and accounts will also be available on the
Company's website at: www.creightonsplc.com and in hard copy to shareholders
upon request from the Company's registered office at 1210 Lincoln Road,
Peterborough, PE4 6ND.
The annual report and accounts for the period ended 31 March 2016 will be
uploaded to the National Storage Mechanism and will be available for viewing
shortly at http://www.morningstar.co.uk/uk/NSM
The Directors will notify shareholders when the accounts are posted and have
been uploaded to the website and to the NSM.
The Company's AGM will take place at the offices of Potter & Moore Innovations
Ltd, 1210 Lincoln Road, Peterborough, PE4 6ND on 21 July 2016 at 12:00 noon.
This information is provided by RNS
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