REG - Creightons PLC - Half-year Report
30/12/2021 07:00
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RNS Number : 9784W Creightons PLC 30 December 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2021
Interim Dividend Declaration
Financial highlights
· Excellent progress in offsetting the loss of the "one off"
£11.54m hygiene sales over the same period in the previous year.
· The above success contained the overall sales reduction to
£2.37m (7.3%).
· The total net sales for the six months were £30.00m (2020:
£32.37m).
· Gross margin percentage increased by 3.4% to 42.7% (2020: 39.3%).
· The success in closing the £11.54m hygiene gap limited the
negative impact on operating profit before exceptional costs to £0.42m
(13.9%). The operating profit before exceptional costs was £2.60m (2020:
£3.01m).
· Operating profit before exceptional costs as a percentage of
sales decreased by 0.7% to 8.6% (2020: 9.3%).
· Profit after tax as a percentage of sales decreased by 0.9% to
6.6% (2020: 7.5%).
· Diluted EPS 2.61p (2020: 3.31p).
· Short term borrowings and loans of £2.90m (2020: Positive net
cash on hand of £2.38m).
· Interim dividend of 0.15p per ordinary share to be paid in
February 2022 (2020: 0.15p).
Operational highlights
· Better than expected success in replacing the previous year's
"one off" hygiene sales generated by the Covid-19 pandemic which were a total
of £14.59m in the previous full year to March 2021. These hygiene sales were
very significant so to have substantially replaced in the first half by growth
in core sales across branded, private label and contract business units before
the full impact of recent acquisitions reflects the underlying strength and
momentum of the business.
· Successfully completed acquisition of two businesses; Emma Hardie
and Brodie & Stone. Their integration is progressing well and the full
benefits will emerge by the beginning of the new financial year.
· The global supply chain issues and raw material cost although
challenging are being managed proactively by our team. The management team
have developed a real-time cost indexing system which monitors all cost
increases. This system facilitates a timely and proactive dialogue with
retailers justifying price increases.
· Costs of Covid 19 defences very much reduced compared to previous
year - however management remain vigilant in the face of the ongoing Covid-19
threat.
Chairman's statement
I am pleased to report that the Group has made significant progress in growing
its core business during the first half year ended 30 September 2021. Core
sales have increased by £8.37m (40.2%) which has substantially replaced the
Covid-19 related hygiene sales which were a once off feature of the previous
half year. We have also successfully completed two acquisitions in the period
- Emma Hardie and Brodie & Stone - which will further strengthen the
underlying branded business. The Group's performance is a tribute to the
agility and resilience of the teams who have again demonstrated the ability to
take advantage of available opportunities and manage potential risks.
Sales and margin
Revenue from core business excluding hygiene and acquisitions increased by
£8.37m to £29.21m (2020: £20.84m). Overall Group sales were £30.00m for
the six months ended 30 September 2021 (2020: £32.37m) a reduction of £2.37m
(7.3%). Sales of hygiene products which were a short term feature of the
previous year declined by £11.54m. We have been successful in substantially
replacing the once off hygiene sales by growth in each of the three business
units. Branded sales (excluding hygiene and acquisitions) increased by 47.0%
from £5.47m to £8.04m with a strong performance from Feather & Down and
Balance Active brands. Private label sales have increased from £10.76m to
£13.09m and have returned to pre-Covid levels with the re-opening of the High
street and the addition of a large contract with a key grocer. Contract
manufacturing sales have increased from £4.60m to £8.08m with all major
customers responding to increased consumer demand. Sales of Emma Hardie
£0.77m and Brodie & Stone £0.02m have been included from the dates of
acquisition of 28(th) July 2021 and 24(th) September 2021 respectively.
Our gross margin was 42.7% in the six months to 30 September 2021 (2020:
39.3%). The main reasons for the increase in margin are a reduction in
Covid-19 related costs from the prior period including, reductions in costs
related to the airfreighting, reduction in stock provisions set aside relating
to hygiene products and a reduction in additional employee welfare cost
together with a return to normal levels of productivity.
Overheads
Distribution costs have decreased by 2.3% to £1.67m (2020: £1.71m) and now
represent 5.5% of sales (2020: 5.3%). The overall cost reduction is driven by
the reduction in revenue. Underlying costs associated with outsourcing the
warehousing are increasing in line with domestic supply pressures. Most of our
total finished good's stocks are now stored at third parties.
Administration costs have increased by 6.9% to £8.55m (2020: £8.00m) with
costs increasing to manage the significant increase in core activity over the
period. We are continuing to strengthen the management structure through a
number of senior appointments to position the Group for future growth and have
awarded pay increases to employees in the period.
Overheads include £0.09m (2020: £0.34m) of additional employee-welfare costs
associated with Covid-19.
Acquisition costs
Acquisition costs of £0.22m in relation to the purchase of Emma Hardie and
Brodie & Stone have been charged to the income statement as exceptional
costs during the period.
Operating profit before exceptional costs
Operating profit before exceptional costs was £2.60m (2020: £3.01m), which
represents a decrease of £0.42m (13.9%). The reduction in overall sales
together with the increased overhead costs results in an operating profit
margin before exceptional costs of 8.6% (2020: 9.3%).
Tax
The tax charge provided in the accounts of £0.28m (2020: £0.48m) represents
a rate of 12.3% (2020: 16.4%).
Earnings per share
The result of the above, including the issue of equity on the two acquisitions
of 2.6m shares, is a reduction in the diluted earnings per share to 2.61p
(2020: 3.31p) a decrease of 21.1%.
Dividend Payments
The Board confirms that it will be paying an interim dividend of 0.15 pence
per ordinary share (2020: 0.15 pence per ordinary share), reflecting the
continued strong performance of the Group to 30 September 2021. This will be
paid in February 2022. This is in addition to the final dividend of 0.50 pence
per ordinary share paid in October 2021 (2020: 0.50 pence per ordinary share).
The total payment in relation to the dividend paid in October 2021 was £0.32m
(2020: £0.32m).
Working capital
Short term borrowings and loans of £2.90m (2020: net cash on hand £2.38m).
The reduction in net cash on hand is mainly due to the cash utilised to
finance the two recent acquisitions which resulted in cash outflows in the
period of £7.53m. The company has access to cash by way of an invoicing
finance facility that is currently in place and could support the cash
position by up to a further £5m. Also, we have increased our investment in
working capital in the period with increase in inventories of 43.7% and trade
debtors of 19.3% including the working capital from acquisitions. Trade
debtors have increased due to the profile of revenue throughout the period.
The second half of the year will see these levels fall as the cash is
received. Trade and other payables remain fairly consistent. Borrowings have
increased due to utilisation of an overdraft and invoice financing facility. A
term loan of £3.00m to be repaid over four years has been drawn in the period
to fund the investment in acquisitions.
Brexit
Brexit has occurred and has resulted in some increased long-term costs
associated with the regulatory management and import and export
administration. These have not materially impacted upon the Group's
performance.
Covid-19
The Group has continued to respond to the challenges presented by Covid-19 and
has ensured continuity of supply to our customers and maintained uninterrupted
production at our Peterborough and Tiverton facilities. The sales of hygiene
products which were a feature of the previous year's sales have not repeated
in the current year.
We will continue to remain vigilant and responsive in the face of the evolving
threat from Covid-19 including the Omicron variant, prioritising the health
and safety of our employees.
Supply chain
The Group has again demonstrated its ability to respond to market events and
opportunities by replacing one off hygiene sales with growth in its core
underlying business and the completion of two acquisitions. In common with
many UK businesses, we have experienced global supply chain pressures
throughout the period which have manifested in the form of delayed deliveries
from suppliers, higher input and overhead costs. We have successfully managed
these issues in the period and maintained supply to our customers. These
pressures are expected to continue into the second half and we will continue
to be proactive in our response to these challenges. In particular we will
seek out new opportunities and endeavour to mitigate any price increases
through price recovery, product reengineering, alternative sourcing and other
cost control measures.
I would like to take this opportunity to thank each and every one of the
Group's employees who have continued to pull together through an exceptionally
difficult period to enable the Group to deliver a strong trading performance.
I would also like to thank our customers, shareholders and suppliers for their
support and loyalty to the Group.
W O McIlroy
Executive Chairman
29 December 2021
Responsibility statement
The names and functions of the Directors of the Company are as follows:
William O McIlroy Executive
Chairman and Chief Executive
Bernard JM Johnson Executive Managing Director
Nicholas DJ O'Shea Non-executive Director and Group Company
Secretary
William T Glencross Non-executive Director
Martin Stevens Deputy Managing Director
Philippa Clark Deputy Managing Director
Paul Forster Non-executive Director
The Board confirms that to the best of its knowledge the condensed set of
financial statements gives a true and fair view of the assets and liabilities,
financial position and profit of the Group and has been prepared in accordance
with IAS 34 'Interim Financial Reporting', as endorsed by the UK and that the
interim management report includes a fair review of the information required
by the Disclosure and Transparency Rules as issued by the Financial Conduct
Authority, namely:
· DTR 4.2.7: An indication of important events that have occurred
during the first six months of the financial year, and their impact on the
condensed set of financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year.
· DTR 4.2.8: Details of related party transactions that have taken
place in the first six months of the current financial year and that have
materially affected the financial position or performance of the enterprise
during that period. Together with any changes in the related parties
transactions described in the last annual report that could have a material
effect on the enterprise in the first six months of the current financial
year.
Going Concern
The directors are pleased to report that the Group continues to meet its debt
obligations and expects to operate comfortably within its available borrowing
facilities. The Group's cash on hand at 30 November 2021 is £0.27m. A
reduction in revenue of 33%, which is significantly more severe than was seen
in the first two months of the Covid-19 pandemic, without management tackling
current overhead levels, over the next 12 months, would not fully utilise the
Group's available working capital resources. The directors have therefore
formed a judgement, at the time of approving the financial statements, that
there is a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future being at least
twelve months from the date of this report. For this reason, the directors
continue to adopt the going concern basis in preparing the financial
statements.
By order of the Board
Nicholas O'Shea
Company Secretary and
Director
29 December 2021
Principal risks and uncertainties
The Board regularly monitors exposure to key risks, such as those related to
production efficiencies, cash position and competitive position relating to
sales. It has also taken account of the economic situation over the past 6
months, and the impact that has had on costs and consumer purchases.
It also monitors those risks not directly or specifically financial, but
capable of having a major impact on the business's financial performance if
there is any failure, such as product contamination and manufacture outside
specification, maintenance of satisfactory levels of customer and consumer
service, accident ratios, failure to meet environmental protection standards
or any of the areas of regulation mentioned above.
The principal risks and uncertainties and their associated mitigating and
monitoring controls which may affect the Group's performance in the next six
months are consistent with those detailed in the Annual Report and Financial
Statements 2021. The main two risks facing the Group relate to the Covid-19
pandemic and the global and domestic supply chain issues, which are covered in
detail in the Chairman's statement.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2021
Consolidated income statement - unaudited
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
Note £000 £000 £000
Revenue 30,005 32,375 61,605
Cost of sales (17,201) (19,650) (36,623)
Gross profit 12,804 12,725 24,982
Distribution costs (1,662) (1,713) (3,353)
Administrative expenses (8,547) (7,998) (16,236)
Operating profit - before exceptional costs 2,595 3,014 5,393
Exceptional costs - acquisition expenses (221) - -
Operating profit 2,374 3,014 5,393
Finance costs 6 (108) (119) (222)
Profit before tax 2,266 2,895 5,171
Taxation 4 (278) (475) (837)
Profit for the year from operations attributable to the equity shareholders of 1,988 2,420 4,334
the parent Company
Dividends
Note Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
Paid in year (£000) - - 421
Paid in year (pence per share) - - 0.65p
Proposed (£000) 98 97 324
Proposed (pence per share) 0.15p 0.15p 0.50p
Earnings per share
Note Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
Basic 3 3.05p 3.74p 6.69p
Diluted 2.61p 3.31p 5.89p
Consolidated statement of comprehensive income - Unaudited
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
£000 £000 £000
Profit for the year 1,988 2,420 4,334
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translating foreign operations (39) (33) 9
Other comprehensive income for the year (39) (33) 9
Total comprehensive income for the year attributable to the equity 1,949 2,387 4,343
shareholders of the parent
Consolidated balance sheet - unaudited
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
Note £000 £000 £000
Non-current assets
Goodwill 331 331 331
Other intangible assets 8 10,951 940 818
Property, plant and equipment 6,012 6,011 5,857
Right-of-use assets 977 1,023 1,090
Deferred tax asset 503 59 339
18,774 8,364 8,435
Current assets
Inventories 13,178 9,170 8,318
Trade and other receivables 15,608 13,087 10,236
Cash and cash equivalents 1,013 2,751 6,558
29,799 25,008 25,112
Total assets 48,573 33,372 33,547
Current liabilities
Trade and other payables 12,192 10,800 9,177
Corporation tax payable 200 428 329
Lease liabilities 249 206 237
Borrowings 3,669 162 166
Deferred and contingent consideration 7 1,628 - -
17,938 11,596 9,909
Net current assets 11,861 13,412 15,203
Non-current liabilities
Lease liabilities 777 870 906
Borrowings 4,827 2,735 2,646
5,604 3,605 3,552
Total liabilities 23,542 15,201 13,461
Net assets 25,031 18,171 20,086
Equity
Share capital 675 647 648
Share premium account 3,886 1,406 1,410
Other reserves 25 25 25
Translation reserve (9) (12) 30
Retained earnings 20,454 16,105 17,973
Total equity attributable to the equity shareholders of the parent Company 25,031 18,171 20,086
Statement of changes in shareholders' equity - unaudited
Share capital Share premium account Other reserves Translation reserve Retained earnings Total equity
£000 £000 £000 £000 £000 £000
At 1 April 2020 647 1,406 25 21 13,467 15,566
Comprehensive income for the six months ended 30 September 2020
Profit for the six months ended 30 September 2020 - - - - 2,420 2,420
Exchange differences on translation of foreign operations - - - (33) - (33)
Total comprehensive income for the six months ended 30 September 2020 - - - (33) 2,420 2,387
Contributions by and distributions to owners
Share-based payment charge - - - - 80 80
Deferred tax through Equity - - - - 138 138
Dividends - - - - - -
Total contributions by and distributions to owners - - - - 218 218
At 30 Sept 2020 647 1,406 25 (12) 16,105 18,171
Comprehensive income for the six months ended 30 March 2021
Profit for the six months ended 31 March 2021 - - - - 1,914 1,914
Exchange differences on translation of foreign operations - - - 42 - 42
Total comprehensive income for the six months ended 31 March 2021 - - - 42 1,914 1,956
Contributions by and distributions to owners
Exercise of options 1 4 - - - 5
Share-based payment charge - - - - 115 115
Deferred tax through Equity - - - - 260 260
Dividends - - - - (421) (421)
Total contributions by and distributions to owners 1 4 - - (46) (41)
At 31 March 2021 648 1,410 25 30 17,973 20,086
Comprehensive income for the six months ended 30 September 2021
Profit for the six months ended 30 September 2021 - - - - 1,988 1,988
Exchange differences on translation of foreign operations - - - (39) - (39)
Total comprehensive income for the six months ended 30 September 2021 - - - (39) 1,988 1,949
Contributions by and distributions to owners
Exercise of options - - - - - -
Issue of shares 27 2,476 - - - 2,503
Share-based payment charge - - - - 165 165
Deferred tax through Equity - - - - 328 328
Dividends - - - - - -
Total contributions by and distributions to owners 27 2,476 - - 493 2,996
At 30 Sept 2021 675 3,886 25 (9) 20,454 25,031
Consolidated cash flow statement - unaudited
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
£000 £000 £000
Profit from operations 2,374 3,014 5,393
Adjustments for:
Depreciation on property, plant and equipment 432 395 846
Depreciation on right of use assets 113 97 206
Amortisation of intangible assets 209 252 497
Loss on disposal of property, plant and equipment 10 - 4
Loss on disposal of Right-of-use asset - - 5
Share based payment charge 165 80 195
3,303 3,838 7,146
Increase in inventories (3,211) (1,776) (924)
Increase in trade and other receivables (3,931) (4,219) (1,369)
Increase in trade and other payables 1,894 2,960 1,337
Taxation paid (291) (174) (684)
Net cash from operating activities (2,236) 629 5,506
Investing activities
Purchase of property, plant and equipment (608) (450) (869)
Purchase of right of use assets - - (34)
Proceeds from sale and lease back (IAS 17) - - 174
Purchase of intangible assets (167) (221) (344)
Repayment of debt - Brodie & Stone (489) - -
Acquisition of Brodie & Stone (2,807) - -
Repayment of debt - Emma Hardie (1,457) - -
Acquisition of Emma Hardie (2,775) - -
Proceeds on disposal of investments - - -
Net cash used in investing activities (8,303) (671) (1,073)
Financing activities
Proceeds on issue of shares - - 5
Principal paid on lease liabilities (116) (92) (188)
Interest on leases liabilities (62) (68) (139)
Interest paid on mortgage loan (44) (47) (89)
Interest paid on overdrafts and loans (2) (4) (4)
Increase in invoice financing utilisation 1,344 - -
Increase/(decrease) of overdraft 948 (554) (554)
Draw down of loan facility 3,000 - -
Repayment on mortgage loan facility (82) (79) (164)
Dividends paid to owners of the parent - - (421)
Net cash used in financing activities 4,986 (844) (1,554)
Net decrease in cash and cash equivalents (5,553) (886) 2,879
Cash and cash equivalents at start of year 6,558 3,670 3,670
Effect of foreign exchange rate changes 8 (33) 9
Cash and cash equivalents at end of year 1,013 2,751 6,558
Notes to the unaudited interim financial report
1. Basis of preparation
The interim financial statements for the six months ended 30 September 2020
and 30 September 2021 and for the twelve months ended 31 March 2021 do not
constitute statutory accounts for the purposes of Section 434 of the Companies
Act 2006. The Annual Report and Financial Statements for the year ended 31
March 2021 have been filed with the Registrar of Companies. The Independent
Auditors' Report on the Annual Report and Financial Statements for the year
ended 31 March 2021 was unqualified, did not draw attention to any matters by
way of emphasis, and did not contain a statement under sections 498(2) or
498(3) of the Companies Act 2006. The 30 September 2021 statements were
approved by the Board of Directors on 29 December 2021. This unaudited interim
report has not been audited or reviewed by auditors pursuant to the Financial
Reporting Council guidance on Review of Interim Financial Information.
The condensed financial statements in this Interim Report have been prepared
in accordance with the requirements of IAS 34 'Interim Financial Reporting' as
endorsed by the UK.
As required by the Disclosure and Transparency Rules of the UK's Financial
Conduct Authority, the condensed set of financial statements has been prepared
by applying the accounting policies and presentation that were applied in the
preparation on the Company's published consolidated financial statements for
the year ended 31 March 2021, which were prepared in accordance with
International Financial Reporting Standards as endorsed by the UK.
The condensed interim financial statements for the six months ended 30
September 2021 and the comparative figures for the six months ended 30
September 2020 are unaudited. The figures for the year ended 31 March 2021
have been extracted from the Annual Report on which the Auditors issued an
unqualified audit report and which have been filed with the Registrar of
Companies.
2. Significant accounting policies
Business combinations
Acquisition of subsidiaries and businesses are accounted for using the
acquisition method. The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of the
acquisition-date fair values of assets transferred to the Group, less
liabilities incurred in exchange for control of the entity acquired.
Acquisition related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities
assumed are recognised at their fair value, except:
· deferred tax assets or liabilities and assets or liabilities
related to employee benefit arrangements that are recognised and measured in
accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
and
· assets that are classified as held for sale in accordance with
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are
measured in accordance with that standard.
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interests in the acquired
entity, and the fair value of the acquirer's previously held equity interests
in the acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interest in the acquired entity
and the fair value of the acquirer's previously held interests in the acquired
entity (if any), the excess is recognised immediately in profit or loss as a
purchase gain.
Adoption of new and revised accounting standards
No new standards impacting on the Group have been adopted in its financial
statements for the year ended 31 March 2021 or the interims ended 30 September
2021.
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early. The Group does not
expect any of the standards issued by the IASB, but not yet effective, to have
a material impact on the Group.
3. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
£000 £000 £000
Earnings
Net profit attributable to the equity holders of the parent company 1,988 2,420 4,334
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
Number Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings 65,196,505 64,746,143 64,757,807
per share
Effect of dilutive potential ordinary shares relating to share options 10,915,679 8,356,145 8,788,756
Weighted average number of ordinary shares for the purposes of diluted 76,112,184 73,102,288 73,546,563
earnings per share
4. Taxation
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
£000 £000 £000
Current tax 162 441 782
Deferred tax liability 116 34 55
Total 278 475 837
5. Notes to cash flow statement
Analysis of changes in net debt
6 months ended 30 September 2021 Overdraft Invoice Financing Mortgage & Term Loan Total
£000 £000 £000 £000
At 1 April 2021 - - 2,812 2,812
Cash flows 948 1,818 2,874 5,640
Interest accruing - - 44 44
At 30 September 2021 948 1,818 5,730 8,496
6 months ended 30 September 2020 Overdraft Invoice Financing Mortgage Total
£000 £000 £000 £000
At 1 April 2020 554 - 2,975 3,529
Cash flows (554) - (126) (680)
Interest accruing - - 47 47
At 30 September 2020 - - 2,896 2,896
12 months ended 31 March 2021 Overdraft Invoice Financing Mortgage Total
£000 £000 £000 £000
At 1 April 2020 554 - 2,975 3,529
Cash flows (554) - (252) (806)
Interest accruing - - 89 89
At 31 March 2021 - - 2,812 2,812
6. Finance costs
Six months ended 30 September 2021 Six months ended 30 September 2020 Year ended 31 March 2021
(Unaudited)
(Unaudited)
(Audited)
£000 £000 £000
Interest on bank overdrafts and loans 2 4 4
Interest on mortgage 44 47 79
Interest on lease liabilities 62 68 139
Total 108 119 222
7. Business combinations
The provisional amounts recognised in respect of the estimated fair value of
identifiable assets and liabilities for the acquisitions made during the six
months to September 2021 was:
Brodie and Stone Limited Emma Hardie Limited Total
Fair value Fair value Fair value
£000 £000 £000
Property, plant and equipment - 1 1
Intangible assets - 58 58
Inventory 304 1,344 1,648
Trade receivable 434 758 1,192
Other debtors - 249 249
Cash at bank - 85 85
Borrowings (463) (474) (937)
Trade payables (141) (426) (567)
Taxation and social security (19) (93) (112)
Other creditor (242) (1,225) (1,467)
Redemption of C shares - (544) (544)
Total net assets (127) (267) (394)
Intangible assets on business combination - Brand value 4,980 5,127 10,107
Total consideration due 4,853 4,860 9,713
The consideration was satisfied as follows:
Cash consideration 2,807 2,775 5,582
Property retention 700 - 700
Deferred consideration 200 84 284
Contingent consideration - 644 644
Share issue 1,146 1,357 2,503
4,853 4,860 9,713
Business combinations made in 2021
Emma Hardie
On 28th July 2021, the Group acquired 100% of the issued share capital of Emma
Hardie Limited. Total consideration was £4.86m, of which £2.77m was paid in
cash, £1.36m was settled by the issue of 1,600,000 shares in Creightons PLC
at a price of £0.8478 per share, and there was £0.084m of deferred
consideration and a further £0.644m in contingent consideration. There was
cash acquired of £0.09m and debt acquired at fair value of £2.34m.
The contingent consideration of £0.644m relates to the share issue on
acquisition of Emma Hardie Limited. The company has guaranteed to the sellers
of Emma Hardie Limited a share price for Creightons PLC at £1.25 per share as
at 28th July 2022. The contingent consideration has been accrued based on the
difference between £1.25 and the market price on date of acquisition.
The provisional fair value of acquired intangible assets is £5.13m and
relates to the Emma Hardie brand acquired. The intangible asset is deemed to
have an indefinite useful life so no amortisation is charged but will be
subject to an annual impairment review.
Brodie & Stone
On 24th September 2021, the Group acquired 100% of the issued share capital of
Brodie and Stone Holdings Limited, and its wholly owned subsidiary Brodie and
Stone International Limited. Total consideration was £4.85m, of which £2.81m
was paid in cash, £1.15m was settled by the issue of 1,000,000 shares in
Creightons PLC at a price of £1.146 per share, £0.70m in relation to a
property retention payment paid in October, and there was £200k of deferred
consideration. There was no cash acquired and debt acquired at fair value of
£0.72m.
The provisional fair value of acquired intangible assets is £4.98m and
relates to various brands acquired. The intangible asset is deemed to have
an indefinite useful life so no amortisation is charged but will be subject to
an annual impairment review.
8. Other intangible assets
Note Computer software Intellectual property Product development costs Brand Total
£000 £000 £000 £000 £000
Cost
At 31 March 2020 251 10 2,847 508 3,616
Additions 2 - 219 - 221
At 30 September 2020 253 10 3,066 508 3,837
Additions 9 - 114 - 123
At 31 March 2021 262 10 3,180 508 3,960
Additions 5 2 - 233 10,107 10,342
At 30 September 2021 264 10 3,413 10,615 14,302
Accumulated amortisation
At 31 March 2020 167 - 2,478 - 2,645
Amortisation in period 14 - 238 - 252
At 30 September 2020 181 - 2,716 - 2,897
Amortisation in period 14 - 231 - 245
At 31 March 2021 195 - 2,947 - 3,142
Amortisation in period 14 - 195 - 209
At 30 September 2021 209 - 3,142 - 3,351
Carrying value
At 31 March 2020 84 10 369 508 971
At 30 September 2020 72 10 350 508 940
At 31 March 2021 67 10 233 508 818
At 30 September 2021 55 10 271 10,615 10,951
9. Related party transactions
The related party transactions that occurred in the six months ended 30
September 2021 are not materially different in size or nature to those
reported in the Company's Annual Report for the year ended 31 March 2021.
10. Availability of Interim Report
The Interim Report is being made available to shareholders on the Company
website www.creightonsplc.com. Further copies can be obtained from the
Company's Registered Office, 1210 Lincoln Road, Peterborough, PE4 6ND.
Interim Dividend Declaration
Creightons plc wishes to confirm that the Company has declared and will pay an
interim dividend of 0.15p per ordinary share as per the timetable below:
Ex-dividend date Thursday 13 January 2022
Record
date Friday 14 January 2022
Payment date Friday 11 February 2022
For more information:
Nicholas O'Shea, Director, Creightons
plc 01733 281000
Roland Cornish, Beaumont Cornish Limited 0207
628 3396
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