REG - Creightons PLC - Preliminary Results for the year to 31 March 2017 <Origin Href="QuoteRef">CRGT.L</Origin> - Part 2
28/06/2017 07:11
- Part 2: For the preceding part double click ID:nRSb3534Ja
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 borrowings over the
year assuming a 1% increase or decrease which is used when reporting interest
rate risk internally to key management personnel.
A 1% increase in bank base rates would reduce Group pre-tax profits by £6,000
(2016: £1,000). A 1% decrease would have the opposite effect. The Group's
sensitivity to interest rates has increased during the current year mainly due
to the increase 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 6% (2016 - 8%) of the
Group's income is denominated in US dollars and 2% (2016 - 2%) in Euros.
Approximately 1% (2016 - 2%) of the Group's expenditure is denominated in US
dollars and 5% (2016 - 4%) in Euros.
Foreign currency sensitivity
A 5% strengthening of sterling would result in a £34,000 (2016 - £40,000)
reduction in profits and equity. A 5% weakening in sterling would result in a
£37,000 (2016 - £45,000) 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 2017. 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
2017 2016 2017 2016
£000 £000 £000 £000
Derivatives that are designated and effective as hedging instruments carried at fair value
Forward foreign currency contracts 19 25 - -
19 25 - -
-
Current liabilities
Group Company
2017 2016 2017 2016
£000 £000 £000 £000
Financial assets carried at fair value through the profit or loss
Forward foreign currency contracts 56 51 - -
56 51 - -
-
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 a 5 year bank loan and manages its working capital requirements
through overdrafts and invoice finance facilities. These facilities are due to
be renewed in March 2018. 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 2017 the Group had available £3,829,000 (2016
- £3,142,000) 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.
Financial assets
Financial assets are included in the statement of financial position within
the following headings. These are valued at amortised cost and are detailed
below.
Group Company
2017 2016 2017 2016
£000 £000 £000 £000
Trade and other receivables 4,699 3,922 2,990 2,349
Cash and cash equivalents 2,631 814 - -
7,330 4,736 2,990 2,349
2,349
Financial liabilities
Financial liabilities are included in the Statement of financial position
within the following headings. These are valued at amortised cost and are
detailed below.
Group Company
2017 2016 2017 2016
£000 £000 £000 £000
Current liabilities
Trade and other payables 4,564 3,543 35 35
Obligations under finance leases - 7 - -
Borrowings 68 - - -
Bank loan 116 - 116 -
Non-current liabilities
Bank loan 418 - 418 -
5,166 3,550 569 35
5,166
3,550
569
35
Fair value hierarchy
The fair value of financial instruments has been determined using the
following fair value hierarchy:
Level 1 The unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the measurement
date.
Level 2 Inputs other than quoted prices included within Level 1 that
are observable (i.e. developed using market data) for the asset or liability,
either directly or indirectly.
Level 3 Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
The fair value of the financial instruments of the Group at 31 March 2017 are
shown in the table below:
2017
Level 1 Level 2 Level 3
£000 £000 £000
Forward foreign currency contracts - (37) -
Bank loan - - (534)
- (37) (534)
(534)
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
2017 2016
£000 £000
Earnings
Net profit attributable to the equity holders of the parent company 1,251 1,329
Year ended 31 March Year ended31 March
2017 2016
Number Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share 59,905,805 59,649,743
Effect of dilutive potential ordinary shares relating to share options 6,850,137 7,005,000
Weighted average number of ordinary shares for the purposes of diluted earnings per share 66,755,942 66,654,743
Earnings per share
Basic 2.09p 2.23p
Diluted 1.88p 1.99p
1.99p
Earnings per share before exceptional item
Basic 2.09p 0.94p
Diluted 1.88p 0.84p
0.84p
4. Share capital
Ordinary shares of 1p each
£000 Number
At 1 April 2015 596 59,537,243
Issued in the year 3 300,000
At 31 March 2016 599 59,837,243
Issued in the year 7 715,000
At 31 March 2017 606 60,552,243
606
60,552,243
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 £17,000 (2016 - £4,000).
5. Notes to consolidated cash flow statement
Year ended 31 March 2017 Year ended 31 March 2016
Group total from Continuing operations Continuing operations Discontinued operations Total Group
£000 £000 £000 £000
Profit from operations 1,275 558 - 558
Adjustments for:
Depreciation on property, plant and equipment 288 196 - 196
Amortisation of intangible assets 333 345 - 345
Profit / (loss) on exceptional items - 2 (232) (230)
Revaluation of assets acquired from administrators of Broad Oak Toiletries - (227) - (227)
Share based payment charge 90 40 - 40
1,986 914 (232) 682
(Increase) / Decrease in inventories (112) 2 160 162
Increase in trade and other receivables (813) (457) - (457)
Increase in trade and other payables 1,021 587 - 587
Increase in deferred tax provision 26 - - -
Movement in non-cash derivatives (26) 5 - 5
Cash generated from operations 2,082 1,051 (72) 979
Interest (paid) / received (24) 1 - 1
Net cash from operating activities 2,058 1,052 (72) 980
980
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. Profit on disposal
During the previous 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
Year ended31 March Year ended31 March
2017 2016
£000 £000
Gain on bargain purchase - 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 recognised a gain on the bargain purchase of £227,000 in the year to
31 March 2016 in relation to the revaluation of plant and equipment. The
assets were acquired at below market value from the administrators of Broad
Oak Toiletries Ltd due to the nature of the sale and subsequently externally
revalued to market values.
In the period following acquisition, Potter and Moore (Devon) Limited
contributed £262,000 to the Group's revenue and £51,000 to the Group's profit
which was included within the consolidated statement of comprehensive income
for the year ended 31 March 2016.
Acquisition related costs of £225,000 were recognised as an exceptional item
within other operating expenses in the consolidated income statement and
related to provisions for reorganisation costs, professional, legal and
valuation services associated with the business combination for the year ended
31 March 2016.
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 2017 or 2016, but is derived from these financial statements. The
financial statements for the year ended 31 March 2016 have been delivered to
the Registrar of Companies. The financial statements for the year ended 31
March 2017 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 2017 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 2017 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 2017 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 10 August 2017 at 12:00
noon.
This information is provided by RNS
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