REG - Greggs PLC - Preliminary Results <Origin Href="QuoteRef">GRG.L</Origin> - Part 2
04/03/2015 07:01
- Part 2: For the preceding part double click ID:nRSD4553Ga
Financial Liabilities - Amendments to
IAS 32
· Recoverable amount disclosures for non-financial assets - Amendments to
IAS 36
The adoption of the above has not had a significant impact on the Group's
profit for the year or equity.
2. Segmental analysis
The Board is considered to be the "chief operating decision maker" of the
Group in the context of the IFRS 8 definition. The information which is
reviewed by the Board for the purposes of assessing financial performance and
allocating resources comprises the income statement for the Company as a
whole.
The Group has identified one operating segment - food-on-the-go retailing
which includes the sale of products through our own shops and franchised
operations. The Group conducts a small amount of wholesale business but this
is not significant in the context of IFRS 8 and it is not anticipated that
this will become a 'Reportable Segment'.
Products and services - the Group sells a consistent range of fresh bakery
goods, sandwiches and drinks in its shops. The Group also provides frozen
bakery products to its wholesale customers.
Major customers - the majority of sales are made to the general public on a
cash basis. A small proportion of sales are made on credit to certain
organisations, including wholesale customers, but these are immaterial in a
Group context.
Geographical areas - all results arise in the UK.
The Board has carefully considered the requirements of IFRS 8 and concluded
that, as there is only one reportable segment whose revenue, profits, assets
and liabilities are measured and reported on a consistent basis with the Group
accounts, no additional numerical disclosures are necessary.
3. Exceptional items
2014 2013
£'000 £'000
Cost of sales
Supply sites - asset impairment - 1,221
- loss on disposal of assets - 463
Closure of in-store bakeries - redundancy and disruption costs 3,190 -
- loss on disposal of assets 664 -
- dilapidations 2,078 -
________ ________
5,932 1,684
Distribution and selling
Shop asset impairment (reversal) / charge (149) 1,790
Loss on disposal of assets - 1,529
Onerous leases 431 3,134
________ ________
282 6,453
Administration expenses
Restructuring of support functions 2,302 -
________ ________
Total exceptional items 8,516 8,137
======= =======
Supply sites
The impairment arose following the decision that additional capacity in the
supply chain was not required in the medium term.
Closure of in-store bakeries
The charge arises from the decision to consolidate the Group's in-store
bakeries into its regional bakery network and comprises of redundancy costs,
asset write-offs and the costs of making good the shops (dilapidations) as
bakery equipment is removed.
Shop impairment and onerous leases
The charges arose from the decision to focus on reshaping the Group's existing
estate through closure and resite of shops and withdrawal from the Greggs
moment brand.
Restructuring of support functions
The charge relates to the redundancy costs incurred in respect of
restructuring within the support functions.
4. Taxation
Recognised in the income statement
2014 2014 2014 2013 2013 2013
Excluding exceptional items Exceptional items Total Excluding exceptional items Exceptional items Total
£'000 £'000 £'000 £'000 £'000 £'000
Current tax expense
Current year 15,776 (1,534) 14,242 12,463 (670) 11,793
Adjustment for prior years (229) - (229) (170) - (170)
________ ________ ________ ________ ________ ________
15,547 (1,534) 14,013 12,293 (670) 11,623
Deferred tax (credit) / expense
Origination and reversal of temporary differences (1,471) (276) (1,747) (886) (713) (1,599)
Reduction in tax rate - - - (1,200) - (1,200)
Adjustment for prior years (79) - (79) 139 - 139
________ ________ ________ ________ ________ ________
(1,550) (276) (1,826) (1,947) (713) (2,660)
________ ________ ________ ________ ________ ________
Total income tax expense in income statement 13,997 (1,810) 12,187 10,346 (1,383) 8,963
======= ======= ======= ======= ======= =======
5. Earnings per share
Basic earnings per share
Basic earnings per share for the 53 weeks ended 3 January 2015 is calculated
by dividing profit attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the 53 weeks ended 3
January 2015 as calculated below.
Diluted earnings per share
Diluted earnings per share for the 53 weeks ended 3 January 2015 is calculated
by dividing profit attributable to ordinary shareholders by the weighted
average number of ordinary shares, adjusted for the effects of all dilutive
potential ordinary shares (which comprise share options granted to employees)
outstanding during the 53 weeks ended 3 January 2015 as calculated below.
Profit attributable to ordinary shareholders
2014 2014 2014 2013 2013 2013
Excluding exceptional items Exceptional items Total Excluding exceptional items Exceptional items Total
£'000 £'000 £'000 £'000 £'000 £'000
Profit for the financial year attributable to equity holders of the Parent 44,262 (6,706) 37,556 30,943 (6,754) 24,189
======= ======= ======= ======= ======= ======
Basic earnings per share 44.0p (6.6p) 37.4p 30.8p (6.7p) 24.1p
Diluted earnings per share 43.4p (6.6p) 36.8p 30.6p (6.7p) 23.9p
Weighted average number of ordinary shares
2014 2013
Number Number
Issued ordinary shares at start of year 101,155,901 101,155,901
Effect of own shares held (638,815) (762,222)
__________ __________
Weighted average number of ordinary shares during the year 100,517,086 100,393,679
Effect of share options on issue 1,517,722 912,387
__________ __________
Weighted average number of ordinary shares (diluted) during the year 102,034,808 101,306,066
========= =========
6. Dividends
The following tables analyse dividends when paid and the year to which they
relate:
2014 2013
Per share Per share
pence pence
2012 final dividend - 13.5p
2013 interim dividend - 6.0p
2013 final dividend 13.5p -
2014 interim dividend 6.0p -
________ ________
19.5p 19.5p
======= =======
The proposed final dividend in respect of 2014 amounts to 16.0 pence per share
(£16,056,000). This proposed dividend is subject to approval at the Annual
General Meeting and has not been included as a liability in these accounts.
2014 2013
£'000 £'000
2012 final dividend - 13,555
2013 interim dividend - 6,027
2013 final dividend 13,530 -
2014 interim dividend 6,040 -
________ ________
19,570 19,582
======= =======
7. Related parties
The Group has a related party relationship with its subsidiaries and its
Directors and executive officers.
There have been no related party transactions in the year which have
materially affected the financial position or performance of the Group.
8. Principal risks and uncertainties
Corporate governance guidance requires the disclosure of principal risks and
uncertainties. A principal risk is defined as "a risk or combination of risks
which can seriously affect the performance, future prospects or reputation of
the entity". This would include risks which would threaten the business'
viability.
Greggs is exposed to a wider range of risks than those listed here. However,
these are considered to be the most important to the future development,
performance or position of the business. The risks listed are not set out in
any particular order, although they are grouped into five themes.
Business strategy & change
Area of principal risk or uncertainty Mitigating actions and controls
Change programme The business has embarked on a long term project to improve operational efficiency, requiring significant capital investment. Progress may not be in line with expectations, or budgets may not be met. The project delivery is overseen by the Operating Board, under the guidance of a project sponsor, providing robust governance. Regular updates are provided to the Board, to monitor progress against clearly defined timelines and financial forecasts. Risk
rating: No change
Information securityGreggs obtains significant quantities of customer data through its loyalty scheme, which needs to be handled in a secure manner. More general "cyber" issues are also an area of risk. A cross functional working group determines priorities for improving the business approach to Information Security. Where appropriate, the Company is investing in training and technology to strengthen controls. Risk rating: No change
Brand & reputation
Area of principal risk or uncertainty Mitigating actions and controls
Product quality and safetyAs a food-on-the-go retailer and manufacturer, good food safety is clearly imperative to maintain consumer confidence in our products. We need to ensure that our ingredients are in line with specification, and are used correctly. Procedures are in place in our bakeries, logistics operations and shops to ensure that food safety is maintained. These procedures are supported by robust audit processes, both internally and by regulatory bodies. Risk rating: No change
Food scareGreggs may suffer from a loss of customer confidence due to a major food scare beyond its control. The majority of products for sale in our shops have been manufactured by our staff in our bakeries. Checks are carried out to confirm the integrity of our ingredients as part of routine processes. Risk rating: No change
Supply chain
Area of principal risk or uncertainty Mitigating actions and controls
Loss of productionSome of our products are produced in one location and distributed nationwide. Any disruption to supply would have a significant impact on our customers. Contingency plans are in place for our supply sites, and these are regularly tested. Annual site inspRecent news on Greggs
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