REG - Creightons PLC - Half-year Report
28/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241128:nRSb9314Na&default-theme=true
RNS Number : 9314N Creightons PLC 28 November 2024
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 UNION (WITHDRAWAL) ACT 2018, AS AMENDED
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2024
Financial highlights
· Improved Gross profit margin of 1.8% to 44.0% (2023: 42.2%) on
lower revenue for the first half of the financial year of £27.1m (2023:
£27.6m) as a result of cost reduction and SKU rationalisation.
· The operating profit before exceptional costs increased to £1.7m
(2023: £0.5m). Operating profit before exceptional costs as a percentage of
sales increased to 6.3% (2023: 1.8%).
· EBITDA (excluding exceptional) for the first half of the
financial year 2024 was £2.5m (2023: £1.4m).
· Diluted EPS was 1.61p (2023: 0.37p).
· Net cash on hand (cash and cash equivalents less short-term
element of obligations under finance leases and borrowings) were £1.5m (2023:
negative £1.7m). Net debt for the Group has reduced to £1.2m (2023: £5.5m).
Operational highlights
· Private label saw growth in revenue whilst Branded and Contract
sales experienced a downturn in revenue
o Private label revenue (retailer own label products) increased by 17.4% to
£14.4m (2023: £12.3m).
o Branded revenue has decreased by 15.0% to £8.9m (2023: £10.4m).
o Contract manufacturing revenue decreased by 21.5% to £3.8m (2023:
£4.9m).
· The increase in selling prices to customers last year has
positively impacted this interim period, as evidenced by the improvement in
gross margin
o Sales teams continue to monitor Cost Price Increase (C.P.I) across all
categories of supply. This was used as the basis to negotiate sales price
increases with customers.
· Reduction in overheads
o Cost rationalisation as well as the integration of the Emma Hardie
subsidiary into the Group has seen administrative costs decreased by 4.8% to
£8.8m (2023: £9.3m).
· Benefits of the relocation of the customer facing aspect of,
warehousing, picking and packing and logistics back to the Peterborough site
are now being fully realised.
o Distribution costs have decreased by 25.3% to £1.4m (2023: £1.9m).
· Reduction in stock levels
o We achieved stock reductions of £1.7m to £8.7m (2023: £10.4m), without
any reduction in effective service levels to customers. Stock continues to be
at lower levels than previous years.
Managing Director's Statement
An Improving Picture
During this period, we have achieved the objective of establishing a strong
fundamentals focused strategy to secure the foundations with which to move
forward and create a sustainable, stable, profitable, and growing business.
Key achievements have been made in private label sales growth, gross profit
margin improvement, continued overhead and stock reduction compared to
September 2023 and positive cash control on a year-on-year basis which is
driving increased earnings per share for shareholders.
Whilst there is strong sales growth in private label, contract manufacturing
continues to slow, and the market continues to be challenging for our
brands. The strategy of pursuing a multi revenue stream model and a broad
multi-category product offering continues to be a positive approach for the
business. This structure enables it to successfully flex and adapt to meet
both retailer and consumer demand.
The global personal care and beauty markets continue to be dominated by
customers seeking value and trend driven products and brands. I believe we
continue to be well placed with our Quality, Service and Innovation approach
to realise growth opportunities. There remains additional market share to be
realised in the UK market coupled with a brand portfolio that has
international appeal, there are more market and channel opportunities on which
we can build.
Revenue Stream Performance
Private Label
Private label sales have increased sales by 17.4% to £14.4m (2023: £12.3m)
as consumers and retail customers continue to seek performance products at
value prices.
This additional growth has been fuelled by a number of factors:
· the addition of two new UK retailers - both key target
achievements
· the speed of launch to market driven by three key customers
· exceptional consumer focussed product development by our research
and development (R&D) teams
· continued category and market expertise, frequently guiding
retailers on product ranges, strategies and consumer positioning
· a fully resourced private label team in both sales and product
management roles.
This is in addition to a good solid performance across the customer base
resulting in sales growth. Creightons continues to be a leading supplier in
the UK for private label supply achieved through exceptional product
development, quality manufacturing and both consistency and speed of supply.
This position is achieved via the Groups' ability to develop products that
deliver relevant, consumer focussed performance all whilst successfully
managing customer forecasts, stock and service levels into a demanding mass
retailer customer base.
Contract Manufacturing
Conversely, contract manufacturing sales have continued to experience a
downturn during the period of 21.5% to £3.8m (2023: £4.9m). This was
anticipated in light of the impact last year of reducing order books due to
declining consumer demand, overstocking and issues obtaining credit
insurance. All factors have continued to impact into this first half.
The competitor profile in the transactional supply segment offers very
low-cost pricing that doesn't meet our desired returns. As a result, this
revenue stream has not been a priority. Instead, resources were focused on the
private label channel, which has proven more successful, as reflected in its
growth.
Opportunities within this revenue category needs to add value to the overall
business, primarily in terms of margin contribution, therefore, any
opportunities are given rigorous consideration. Development with existing
customers is ongoing and a number of new potential sales opportunities are
under review.
Brands
Brand performance in the first half has been challenging and overall has seen
a reduction of 15.0% to £8.9m (2023: £10.4m).
A number of factors have impacted:
· The deliberate exit of poor margin performing products during the
past 18 months has contributed to the decline in product listings in the UK
discounters. This is fuelled by the ongoing 'dupe' (an affordable product
match to a luxury benchmark) trend which is taking increased shelf space.
This has resulted in significantly reduced opportunities to launch new product
development (NPD) in our core Creightons brand. Our haircare offering has
witnessed the most significant decline although with product lines which were
low margin performers. New NPD and positioned products in the category will be
launched during 2025.
· Poor performance by a number of key distributors in international
markets. This has included the cessation of two distributors that have broken
contract terms. This has impacted Balance Active Formula performance in the
main.
· A sizable international retail customer in the discount space has
pivoted into 'dupe' and 'fast follow' products, resulting in a decline in
brand NPD opportunities in the period. Recent positive meetings with their
senior team have presented opportunities to return to growth into 2025 with
more creative product and buying strategies on current brand listings, and
opportunities for exclusive brand development.
Despite the challenges, there are positive gains in brand which are central to
moving growth forward. UK Grocery and High Street are delivering gains.
· Tzone: continues to perform well across the market, with new
listings and NPD coming during 2025.
· Feather and Down: the main UK listing is in growth and the brand
has launched into its first international market, Spinneys in UAE.
Additional shelf space and stores in the UK market are planned into 2025.
· The Curl Company: continues to grow in both the UK and its
current international direct to retail markets. NPD planned for 2025 in all
markets and to drive new listings.
· Balance Active Formula: despite the international challenges, is
performing in UK retailers, specifically within grocery. Meaningful
discussions with another grocery listing underway.
· Emma Hardie has witnessed growth in the UK market since the
purchase of the brand in July 2021 (more detail below).
Sales growth and margin maintenance are the priorities moving forward. The
focus with current customers, UK and international, is on increasing the
number of outlets stocking Group branded product and increasing footprint in
each store. Gaining more space, and more products driven by NPD, in more
stores is the goal. We also need to build on our direct to retail
international business with new customers in additional markets to de-risk
global expansion.
Emma Hardie
A more focused and integrated team approach over the first half of this year
has resulted in growth in UK sales for the brand. The brand is now making a
positive contribution to the Group.
The revised sales strategy outlined previously remains central to growing the
brand. This includes:
· Expansion into the international market, China: Relaunch of sales
activities on digital platforms will commence in early 2025 with a revised to
market model.
· Digital: ongoing and increased investment across Amazon, third
party pure players and Emmahardie.com continues to be a priority channel.
· Travel Sector: the initial trial launch of the brand into the
UK's duty-free travel sector is yielding positive results. This success is
helping to create a more tailored travel product offering, with plans to
continue testing and expanding this channel.
· UK Offline: key retail listings in the UK channel remain the core
sales driver of the brand with Marks & Spencer performing well and
meaningful discussions underway with two potential new listings during 2025.
The brand benefits from an exceptionally loyal and repeat purchase customer
base here in the UK. This is coupled with significant industry awareness and
recognition which is a testament to its superior product performance. The
key developmental objective is to build wider consumer awareness of the
brand. Additional listings in the UK market, extending the digital footprint
and expanding the travel channel will be key steps in achieving this.
Research and Development
Central to our success and strategy, the team continues to grow in both skills
and performance. Year-to-date, we have achieved two significant successes,
alongside ongoing focused developments in skincare NPD. There has been a
significant increase in pace required by the market for product launches and
NPD. Our R&D team has delivered on ensuring we can realise the
opportunities presented by stepping up skill sets and increasing speed of
product diversity, innovation and products that consumers want here and now.
This has been key in the reported private label growth.
SPF skincare developments continue to progress and will result in our first
branded SPF skincare products launching in early 2025, in Balance Active
Formula and TZone brands. Private label and some existing contract customer
opportunities within this category of product are also being progressed.
As the consumer continues to demand more performance skincare for a wider
range of solutions and needs, we continue to invest in textures, ingredient
performance and new technologies.
Moving into the second half of 2025 and beyond, a re-focus on haircare NPD
will feature as an area for both private label and branded revenue streams.
Manufacturing and Operations
Production
This period has seen a continuing improvement in production efficiencies which
has contributed to the overall gross profit margin improvements being
reported. There are a number of areas driving this:
· A continual review of the output of each production line; working
methodically through both speed and technical bottlenecks.
· Investing in areas to increase capacity and reduce labour cost or
utilise resource more efficiently.
· Implementing an enhanced grading scheme for operational staff and
investing in upskilling.
· Ongoing drive to reduce change over times and downtime.
As we move forward teams are working on reviewing IT solutions, including AI,
across the whole operation to reduce administration, increase output and
reduce labour intensive operations. This will be a continual and ongoing
investment area.
Logistics
The benefits of significantly reducing reliance on a 3PL for warehousing in
the past year continues to deliver both efficiency and cost benefits. This
includes investing to build a more multi-skilled and flexible team.
Distribution gains have also been made in the transfer of goods between the
two sites through improved planning, extended visibility and eliminating
inefficiency where evident.
Procurement
Purchasing continues to be focused on delivering gains where possible and
working on ensuring the reduction in inflationary pressures flow through to
reducing costs. Some headwinds in specific raw material supplies are
anticipated into early 2025 where environmental issues or legislation are
impacting upon supply. We are looking forward where possible to mitigate and
identify additional sources in order to keep any impact to a minimum.
Team Development
I am pleased to report that we have made significant progress in recruiting
industry experienced skilled staff to fill vacancies over the past six months,
particularly within the private label sales team and senior branded sales
positions. This will help us drive for and deliver new sales listings.
The senior management team continues to grow and deliver on the continuous
improvements required to support the growth plans.
Summary and Outlook
I am pleased with the notable improved performance for this trading period and
commend the wider team on delivering the objectives we set earlier in the year
to remain focused on stabilising the core business.
The next 6 - 12 months will see more new product development being delivered
to support private label sales growth, but also to reverse brands which have
declined in a focussed drive back to growth. This will include a number of
exclusive brand extensions with key retail partners in order to compete with
'dupe' product offerings, alongside strategic new developments for long term
brand growth. We continue to ensure consumer insight and data is at the core
of development to help deliver the best outcomes of success.
There will always be ongoing challenges facing any business. Our trading
history demonstrates that as a team we have always been flexible and adept at
meeting these challenges. The Group calculates that the annual impact of the
budget announcements will total £0.6m, with increased NI costs of £0.4m, and
the increase in the national minimum wage of £0.2m. There will also be an
additional impact on pay differentials that will need to be managed. The
management team are in the process of identifying and implementing detailed
plans to mitigate the impact. This will include the need to re-negotiate
prices with our customers where possible, product re-engineering, reviews of
working practices to streamline processes, including utilising technology and
key operational investments, where appropriate.
Creightons is a multi-revenue stream business that at its core demonstrates
agility and flexibility along with market and product expertise to meet and
exceed the demands of a constantly evolving market and consumer. Our
strength in the private label supply channel is evident in the enviable
customer base we supply and our strategic retail partnerships.
We have embarked upon a strategic review of our market, sales and brand
development strategy to ensure that we can deliver above trend sales growth
across all areas of our business.
Strength in private label supply, creativity in brand development and robust
service to the market presents opportunities to expand the business as we move
into 2025/2026.
Finally, I would like to thank our valued team of employees, customers,
suppliers and all stakeholders for their continued support.
Philippa Clark
Group Managing Director
Financial overview
Revenue
Revenue for Private label increased to £14.4m (2023: £12.3m), Branded
revenue reduced to £8.9m (2023: £10.4m), and Contract revenue reduced to
£3.8m (2023: £4.9m).
Six months ended Six months ended Movement vs Same Period Last Financial Year % Change vs Same Period Last Financial Year
30 September 2024 30 September 2023
(Unaudited)
(Unaudited)
£000 £000 £000
Branded 8,851 10,417 (1,566) (15.0)%
Private label 14,395 12,259 2,136 17.4%
Contract 3,822 4,868 (1,046) (21.5)%
Other 10 11 (1) (9.1)%
Net sales 27,078 27,555 (477) (1.7)%
Revenue is generated from three main revenue streams, Branded, Private label
and Contract. Each of these revenue streams are reported in the statutory
accounts are net of deductions. These sales related deductions consist of
Contracted retailer support, Settlement discounts, and Retailer promotions.
These activities are sales related activities that help generate additional
revenue for the business.
Branded sales have experienced a reduction in revenue largely due to the
Group's strategy of rationalising SKU's that do not achieve a commercially
viable contribution margin. Additionally, increased competition from "dupes"
(an affordable product match to a luxury benchmark), in the discount sector
has resulted in a decline in U.K. sales and poor performing distributors in
selected international markets.
Contract sales continue to be challenged through contract customers being
overstocked and the inability to obtain credit insurance.
Private label has seen significant growth as a result of new customer wins,
and our dominance in the market of being highly innovative, increasing pace of
NPD delivery and exceptional quality and strength of service.
Gross Profit Margin
Gross profit margin increased in the period to 44.0% (2023: 42.2%) due to
proactive measures taken by the Group in the areas of SKU rationalisation,
customer price increases, cost mitigation, product re-engineering and
manufacturing efficiency improvements. The Group continues to benefit from the
systems and processes implemented previously to monitor Cost Price Increases
(C.P.I's) across all categories of supply. These included but were not limited
to, plastics, raw materials, energy, wage inflation and transport (global and
domestic) costs.
Overheads
Distribution costs have decreased by 25.3% to £1.4m (2023: £1.9m) and now
represent 5.2% of sales (2023: 6.8%).
This is primarily as a result of the decision to exit the majority of
third-party logistics providers and bringing picking and packing of finished
goods in house. The underlying costs associated with outsourcing the
warehousing and third-party storage have decreased by £0.3m to £0.1m (2023:
£0.4m). A phased approach was undertaken to ensure consistency of supply and
service levels with the majority of the savings being realised in the second
half of the previous financial year. This has had a positive impact on both
costs and the efficiencies of the business going forward.
Administration costs have decreased by 4.8% to £8.8m (2023: £9.3m). The
reduction in costs have largely been driven by a combination of cost
rationalisation to align overheads with the reduced business activity. A
decision made to fully integrate the Emma Hardie business within the Group's
operations and facilities has significantly reduced overheads attributable to
the subsidiary by £0.4m. Investment in the brand, particular consultant costs
and trading partner costs have been curtailed to allow the Group to
re-evaluate its strategy for the brand.
Operating profit before exceptional costs
Operating profit before exceptional costs was £1.7m (2023: £0.5m), which
represents an increase of £1.2m. Strategic sales price increases that
balanced competitiveness with profitability have positively impacted the
operating profit margin despite the marginal decline in revenue. Additionally,
the Group has been efficient in the management of its operating costs relative
to its revenue. As a result, a greater percentage of revenue is translated
into profit after covering operating expenses. Operating profit margin before
exceptional costs increased to 6.3% (2023: 1.8%).
Tax
The tax charge provided in the accounts is £0.47m (2023: £0.02m).
Earnings per share
The diluted earnings per share in the six-month period was 1.61p (2023:
0.37p).
Cash on hand
Net cash on hand (cash and cash equivalents less short-term element of
obligations under finance leases and borrowings) is positive £1.5m (2023:
negative £1.7m). The improvement in cash of £3.2m, is mainly attributable to
continued improvements in profit from operations and after paying dividends of
£0.31m.
Stock
Stock has reduced by £1.7m to £8.7m (2023: £10.4m) in the period. This was
achieved by a targeted reduction in purchasing quantities and manufacturing
batch sizes to reduce stock holding on both raw materials and finished goods.
The reduction in stock levels was a key factor in enabling the transfer of
finished goods from third-party warehousing to the main site in Peterborough.
Net gearing
With the increase in cash generation and reduction in cash outflow the
business was able to utilise the cash generated to improve its liquidity by
reducing its reliance on short term borrowings. Additionally, the Group has
reduced its gearing by making an overpayment in March 2024 and August 2024 to
pay down the full balance of the term loan outstanding at the year end. The
Net gearing of 5.2% (2023: 21.4%) has decreased by 16.2% in the year.
Dividend Payments
The Board does not propose an interim dividend (2023: Nil).
A final dividend for the year ended 31 March 2024 of 0.45 pence per ordinary
share (2023: nil) was paid on 2 September 2024. The Group had exhibited strong
operational performance and generated cash which in turn has improved the
Group's liquidity and reduced its gearing. This is consistent with the
Directors' objective to align future dividend payments to the future
underlying earnings and cash requirements of the business. The total dividend
paid in the period ended 30 September 2024 was £0.3m (2023: nil).
Responsibility statement
The names and functions of the Directors of the Company are as follows:
Paul
Forster
Non-Executive Chairman
Philippa
Clark
Group Managing Director
Martin
Stevens
Deputy Group Managing Director
William O
McIlroy
Non-Executive Director
William T
Glencross
Non-Executive Director
Nicholas DJ
O'Shea
Non-Executive Director
Brian Geary
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 party
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 has renewed its bank
facilities and continues to meet its debt obligations and expects to operate
comfortably within its available borrowing facilities. The Group's cash on
hand at 27 November 2024 is positive £1.0m. As at 31 March 2024 the Group
carried out a review of our cash requirements for the next 12 months.
Scenarios modelled included the removal of the Group's largest customer and
increases of 20% in costs of raw materials or overheads. These models are more
extreme than the conditions prevailing during the last 12 months but
demonstrate that even without management tackling current overhead levels or
increasing prices to customers, the Group would not fully utilise available
bank facilities over the next 12 months. 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
Paul Forster
Non-Executive
Chairman
27 November 2024
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 2024. The main risk facing the Group relates to the inflationary
pressures and weak economic environment. These are covered in detail in the
Managing Director's statement.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2024
Consolidated income statement - unaudited
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended
31 March 2024
(Audited)
Note £000 £000 £000
Revenue 27,078 27,555 53,194
Cost of sales (15,166) (15,923) (30,364)
Gross profit 11,912 11,632 22,830
Distribution costs (1,400) (1,874) (3,488)
Administrative expenses (8,812) (9,252) (17,804)
Operating profit before exceptional items 1,700 506 1,538
Exceptional items - Redundancy costs 7 - - (17)
Exceptional items - Impairment 7 - - (4,449)
Operating profit 1,700 506 (2,928)
Other income - RDEC income 8 69 - -
Finance costs 6 (88) (204) (349)
Profit / (Loss) before tax 1,681 302 (3,277)
Taxation 4 (464) (17) (250)
Profit / (Loss) for the period from operations attributable to the equity 1,217 285 (3,527)
shareholders of the parent Company
Consolidated statement of comprehensive income - unaudited
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended
31 March 2024
(Audited)
£000 £000 £000
Profit / (Loss) for the period 1,217 285 (3,527)
Items that may be subsequently reclassified to profit and loss:
Exchange differences on translating foreign operations (9) 8 13
Other comprehensive income / (Loss) for the period (9) 8 13
Total comprehensive income / (Loss) for the period attributable to the equity 1,208 293 (3,514)
shareholders of the parent
Dividends
Note Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Unaudited)
(Unaudited)
(Audited)
Paid in period (£000) 314 - -
Paid in period (pence per share) 0.45 - -
Proposed (£000) - - 314
Proposed (pence per share) - - 0.45
Earnings per share
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Unaudited)
(Unaudited)
(Audited)
Note
Basic 3 1.78p 0.42p (5.15p)
Diluted * 1.61p 0.37p (5.15p)
* For the year ended 31 March 2024, share options are excluded from the
earnings per share calculation due to their anti-dilutive effect on the loss
after tax attributable to equity holders.
Adjusted Earnings per share - alternate performance measure
The following calculation of the basic and diluted earnings per share
excluding exceptional items has been calculated based on adding back the
following deductions from (loss) / profit after tax for the year ended 31
March 2024. Note there were no exceptional items and thus no adjusted EPS calc
for the interim period required for September 2024 and September 2023:
Year ended 31 March 2024
(Audited)
£000
(Loss) for the period from operations attributable to the equity shareholders (3,527)
of the parent Company
Exceptional items - Impairment 4,449
Exceptional items - Deferred tax charge not previously recognised 165
Adjusted Earnings excluding exceptional items 1,087
Adjusted Basic earnings per share - excluding exceptional items 1.59p
Adjusted Diluted earnings per share - excluding exceptional items 1.42p
Consolidated balance sheet - unaudited
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Audited)
£000 £000 £000
Non-current assets
Goodwill 1,575 2,857 1,575
Other intangible assets 6,395 10,931 6,374
Property, plant and equipment 4,883 5,636 5,219
Right-of-use assets 1,374 1,281 1,093
14,227 20,705 14,261
Current assets
Inventories 8,683 10,445 8,225
Trade and other receivables 13,777 12,474 10,518
Cash and cash equivalents 2,254 1,681 3,138
24,714 24,600 21,881
Total assets 38,941 45,305 36,142
Current liabilities
Trade and other payables 10,215 9,225 8,265
Corporation tax payable 526 - 105
Lease liabilities 531 387 351
Borrowings 188 3,000 620
11,460 12,612 9,341
Net current assets 13,254 11,988 12,540
Non-current liabilities
Deferred tax liability 1,751 2,948 1,798
Lease liabilities 732 797 633
Borrowings 2,006 3,031 2,315
4,489 6,776 4,746
Total liabilities 15,949 19,388 14,087
Net assets 22,992 25,917 22,055
Equity
Share capital 700 700 700
Share premium account 2,024 2,024 2,024
Merger reserve 2,476 2,476 2,476
Treasury shares (576) (576) (576)
Other reserves (211) (211) (211)
Translation reserve 18 22 27
Retained earnings 18,561 21,482 17,615
Total equity attributable to the equity shareholders of the parent Company 22,992 25,917 22,055
Statement of changes in shareholders' equity - unaudited
Share capital Share premium account Merger reserve Treasury shares Other reserves Translation reserve Retained Earnings Total equity
£000 £000 £000 £000 £000 £000 £000 £000
At 1 April 2023 700 2,022 2,476 (576) (211) 14 21,054 25,479
Comprehensive income for the period
Profit for the six-month period - - - - - - 285 285
Exchange differences on translation of foreign operations - - - - - 8 - 8
Total comprehensive income for the six months ended 30 September 2023 - - - - - 8 285 293
Contributions by and distributions to owners
Exercise of options - 2 - - - - - 2
Share-based payment charge - - - - - - 143 143
Total contributions by and distributions to owners - 2 - - - - 143 145
At 30 September 2023 700 2,024 2,476 (576) (211) 22 21,482 25,917
Comprehensive income for the period
Profit for the six-month period - - - - - - (3,812) (3,812)
Exchange differences on translation of foreign operations - - - - - 5 - 5
Total comprehensive income for the six months ended 31 March 2024 - - - - - 5 (3,812) (3,807)
Contributions by and distributions to owners
Share-based payment charge - - - - - - (32) (32)
Deferred tax through Equity - - - - - - (23) (23)
Total contributions by and distributions to owners - - - - - - (55) (55)
At 31 March 2024 700 2,024 2,476 (576) (211) 27 17,615 22,055
Share capital Share premium account Merger reserve Treasury shares Other reserves Translation reserve Retained Earnings Total equity
At 31 March 2024 700 2,024 2,476 (576) (211) 27 17,615 22,055
Comprehensive income for the period
Profit for the six-month period - - - - - - 1,217 1,217
Exchange differences on translation of foreign operations - - - - - (9) - (9)
Total comprehensive income for the six months ended 30 September 2024 - - - - - (9) 1,217 1,208
Contributions by and distributions to owners
Share-based payment charge - - - - - - 23 23
Deferred tax through Equity - - - - - - 20 20
Dividends - - - - - - (314) (314)
Total contributions by and distributions to owners - - - - - - (271) (271)
At 30 September 2024 700 2,024 2,476 (576) (211) 18 18,561 22,992
Consolidated cash flow statement - unaudited
Note Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Audited)
£000 £000 £000
Profit from operations including redundancy costs 1,769 506 1,521
Adjustments for:
Depreciation on property, plant and equipment 479 509 992
Depreciation on right of use assets 211 183 368
Amortisation of intangible assets 90 160 358
(Profit)/Loss on disposal of property, plant and equipment (1) (7) 59
Share based payment charge 22 143 111
Other income / RDEC (69) - -
2,501 1,494 3,409
(Increase) / decrease in inventories (458) (217) 2,003
(Increase) / decrease in trade and other receivables (3,258) 259 2,215
Increase / (decrease) in trade and other payables 1,948 (611) (1,570)
Cash generated from operations 733 925 6,057
Taxation paid - - (30)
Net cash from operating activities 733 925 6,027
Investing activities
Purchase of property, plant and equipment (152) (251) (321)
Purchase of intangible assets (111) (197) (287)
Proceeds from sale of assets 10 - -
Net cash used in investing activities (253) (448) (608)
Financing activities
Proceeds on issue of shares - 2 2
Principal paid on lease liabilities (252) (339) (568)
Cancellation of leases - - (59)
Repayment of invoice financing facilities 5 - (454) (1,557)
Increase of overdraft 5 - 887 -
Repayment of amounts borrowed 5 (37) - (61)
Repayment on term loan 5 (611) (426) (1,329)
Interest paid on term loan 5 (18) - (123)
Repayment on mortgage loan facility 5 (93) (127) (180)
Interest paid on mortgage loan facility 5 (34) - (72)
Interest received on bank deposit 4
Dividends paid (314) - -
Net cash used in financing activities (1,355) (457) (3,947)
Net movement in cash and cash equivalents (875) 20 1,472
Cash and cash equivalents at start of period 3,138 1,653 1,653
Effect of foreign exchange rate changes (9) 8 13
Cash and cash equivalents at end of period 2,254 1,681 3,138
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2024
Notes to the unaudited interim financial report
1. Basis of preparation
The interim financial statements for the six months ended 30 September 2024 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 2024 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 2024 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 2024 statements
were approved by the Board of Directors on 26 November 2024. 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 2024, which were prepared in accordance with the
UK-adopted international accounting standards.
The condensed interim financial statements for the six months ended 30
September 2024 and the comparative figures for the six months ended 30
September 2023 are unaudited. The figures for the year ended 31 March 2024
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
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 2024 or the interims ended 30 September
2024.
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 - Unaudited
The calculation of the basic and diluted earnings per share is based on the
following data:
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Audited)
£000 £000 £000
Earnings
Net profit attributable to the equity holders of the parent company 1,217 285 (3,527)
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Audited)
Number Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings 68,435,383 68,430,950 68,433,858
per share
Effect of dilutive potential ordinary shares relating to share options 7,128,857 9,141,557 8,310,548
Weighted average number of ordinary shares for the purposes of diluted 75,564,240 77,572,507 76,744,406
earnings per share
Basic 1.78p 0.42p (5.15p)
Diluted 1.61p 0.37p (5.15p)
4. Taxation - Unaudited
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Audited)
£000 £000 £000
Current tax 499 (11) 135
Deferred tax liability (35) 28 115
Total 464 17 250
5. Notes to cash flow statement - Unaudited
Analysis of changes in net debt
6 months ended 30 September 2024 Overdraft Invoice Financing Mortgage Loan Total
£000 £000 £000 £000 £000
At 1 April 2024 37 - 2,287 611 2,935
Cash flows (37) - (93) (611) (741)
Cash outflow - interest - - (34) (18) (52)
Interest accruing - - 34 18 52
At 30 September 2024 - - 2,194 - 2,194
6 months ended 30 September 2023 Overdraft Invoice Financing Mortgage Loan Total
£000 £000 £000 £000 £000
At 1 April 2023 26 1,557 2,467 1,940 5,990
Cash flows 887 (454) (127) (426) (120)
Interest 61 - 37 63 161
At 30 September 2023 974 1,103 2,377 1,577 6,031
12 months ended 31 March 2024 Overdraft Invoice Financing Mortgage Loan Total
(Audited)
£000 £000 £000 £000
At 1 April 2023 26 1,557 2,467 1,940 5,990
Cash flows (61) (1,557) (180) (1,329) (3,127)
Cash outflow - interest - - (72) (123) (195)
Interest accruing 72 - 72 123 267
At 31 March 2024 37 - 2,287 611 2,935
6. Finance costs - Unaudited
Six months ended 30 September 2024 Six months ended 30 September 2023 Year ended 31 March 2024
(Audited)
£000 £000 £000
Interest on bank overdrafts and loans 18 124 195
Interest on mortgage 34 37 72
Interest on lease liabilities 40 43 86
Other interest (4) - (4)
Total 88 204 349
7. Exceptional items
Redundancy costs in year ended 31 March 2024
Redundancy costs of £0.02m have been incurred in the year to March 2024.
Impairment of Emma Hardie brand value in year ended 31 March 2024
As required by IAS 36, the Group reassesses its capitalised intangible assets
for impairment on an annual basis. Following the difficult trading years of
the Emma Hardie subsidiary, management have assessed that the brand value
acquired on acquisition in relation to Emma Hardie has been impaired by
£4.4m. This is shown as a separate line item in the Consolidated profit and
loss account as it is an expense that is not in line with the normal trading
operations of the Group. The impact of this impairment was not cash impacting
and was an entry that reduces the intangible assets (Brand value for Emma
Hardie) on the balance sheet with a corresponding entry in the Consolidated
income statement. The associated goodwill and deferred tax liability were
derecognised from the balance sheet. Please refer to notes 3, 8, 13 and note
14 of the full accounts to 31 March 2024.
8. Updated SME R&D Relief Scheme: For accounting periods beginning on
or after 01 April 2024
The UK Government's recent overhaul of the R&D tax relief system has
resulted in a merged "single" Research and Development Expenditure Credit
(RDEC) Scheme which provides a headline credit rate of 20%. This credit will
now be recognised as "other income" and is taxable, leading to a net benefit
15% of qualifying R&D expenditure. The Group pays the main corporation tax
rate of 25%.
9. Related party transactions
The related party transactions that occurred in the six months ended 30
September 2024 are not materially different in size or nature to those
reported in the Company's Annual Report for the year ended 31 March 2024.
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.
For more information:
Pippa Clark, Director, Creightons
plc 01733
281058
Roland Cornish, Beaumont Cornish Limited
0207 628 3396
Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is Financial Adviser to the
Company in relation to the matters referred herein. Beaumont Cornish Limited
is acting exclusively for the Company and for no one else in relation to the
matters described in this announcement and is not advising any other person
and accordingly will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Beaumont Cornish Limited, or
for providing advice in relation to the contents of this announcement or any
matter referred to in it.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BRBLTMTBTBMIRecent news on Creightons
See all newsREG - Creightons PLC - Promotion of CFO to the Board of Directors
AnnouncementREG - Creightons PLC - Notification of transactions by PDMR
AnnouncementREG - Creightons PLC - Notification of transactions by PDMR
AnnouncementREG - Stock Exch Notice Creightons PLC - Readmission - Creightons Plc
AnnouncementREG - Creightons PLC - Admission to AIM and first day of dealings
Announcement