REG - Greggs PLC - Preliminary Results <Origin Href="QuoteRef">GRG.L</Origin> - Part 2
27/02/2018 07:05
- Part 2: For the preceding part double click ID:nRSa9825Fa
- - - (35,451) (35,451)
________ ________ ________ ________ ________
Balance at 30 December 2017 2,023 13,533 416 283,391 299,363
======= ======= ======= ======= =======
Greggs plc
Consolidated statement of cashflows
for the 52 weeks ended 30 December 2017 (2016: 52 weeks ended 31 December
2016)
2017 2016
£'000 £'000
Operating activities
Cash generated from operations (see below) 134,470 133,773
Income tax paid (17,602) (16,157)
________ ________
Net cash inflow from operating activities 116,868 117,616
________ ________
Investing activities
Acquisition of property, plant and equipment (68,646) (74,016)
Acquisition of intangible assets (3,918) (6,106)
Proceeds from sale of property, plant and equipment 2,171 4,698
Interest received 249 124
________ ________
Net cash outflow from investing activities (70,144) (75,300)
________ ________
Financing activities
Sale of own shares 5,358 4,063
Purchase of own shares (11,352) (12,398)
Dividends paid (32,187) (30,936)
________ ________
Net cash outflow from financing activities (38,181) (39,271)
________ ________
Net increase in cash and cash equivalents 8,543 3,045
Cash and cash equivalents at the start of the year 45,960 42,915
________ ________
Cash and cash equivalents at the end of the year 54,503 45,960
======= =======
Cash flow statement - cash generated from operations
2017 2016
£'000 £'000
Profit for the financial year 56,906 57,993
Amortisation 3,435 2,100
Depreciation 50,044 43,453
(Reversal of impairment) / impairment (415) 488
Loss on sale of property, plant and equipment 2,719 2,476
Release of government grants (472) (472)
Share-based payment expenses 1,835 1,994
Finance expense 368 26
Income tax expense 15,039 17,149
Increase in inventories (2,754) (490)
Increase in receivables (2,652) (3,066)
Increase in payables 4,497 11,845
Increase in provisions 5,920 277
________ ________
Cash from operating activities 134,470 133,773
======= =======
Greggs plc
Notes
1. Basis of preparation and accounting policies
The preliminary announcement has been prepared in accordance with the
recognition and measurement principles of International Financial Reporting
Standards as adopted by the EU ("adopted IFRSs"), IFRIC interpretations and
the Companies Act 2006 applicable to companies reporting under IFRS. It does
not include all the information required for full annual accounts.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 December 2017 or 31 December 2016
but is derived from these accounts. Statutory accounts for the 52 weeks ended
31 December 2016 have been delivered to the registrar of companies, and those
for the 52 weeks ended 30 December 2017 will be delivered in due course. The
auditor has reported on those accounts; the audit reports were (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The preliminary announcement has been prepared using the accounting policies
published in the Group's accounts for the 52 weeks ended 31 December 2016,
which are available on the Company's website www.greggs.co.uk. There are no
accounting standards, amendments or interpretations that have been adopted by
the Group since 1 January 2017.
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. In addition to its retail
activities, the Group generates revenues from franchise and wholesale.
However, these elements of the business are not sufficiently significant to be
"Reportable Segments" in the context of IFRS 8.
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 regularly reviews the revenues of each segment separately but
receives information on profits, assets and liabilities on an aggregated basis
consistent with the Group accounts. Of the Group's revenue, £891,778,000
(2016: £835,786,000) was attributable to the retail segment.
3. Exceptional items
2017 2016
£'000 £'000
Cost of sales
Supply chain restructuring - redundancy costs 7,458 3,028
- gain on property disposal (403) -
- depreciation and asset write-off 1,245 1,852
- transfer of operations 1,302 44
- property related 458 -
Prior year items - dilapidations - (557)
__________ __________
10,060 4,367
Distribution and selling
Supply chain restructuring - redundancy costs - 1,108
- transfer of operations - 356
Prior year items - property related (198) (870)
__________ __________
(198) 594
Administrative expenses
Restructuring of support functions - 391
Prior year items - redundancy costs - (175)
__________ __________
- 216
________ ________
Total exceptional items 9,862 5,177
======= =======
Supply chain restructuring
This charge arises from the decisions, announced in 2016 and 2017, to invest
in and reshape the Company's supply chain in order to support future growth.
In 2017 the costs relate to the sale of one bakery site, including the gain on
disposal, redundancy costs relating to the consolidation of production
processes, accelerated depreciation and other contractual arrangements that
arise as a result of this consolidation. In 2016 the costs related to the
closure of three bakery sites and include redundancy and other
employment-related costs, asset write-offs, impairment and transfer and other
contractual obligations that arose as a result of the closure of the sites.
Restructuring of support functions
This charge related to redundancy costs arising from the restructuring of
bakery administration and payroll functions.
Prior year items
These relate to the movement on costs treated as exceptional in prior years
and arise from the settlement of various property and redundancy
transactions.
4. Taxation
Recognised in the income statement
Excluding exceptional items Exceptional items Total Excluding exceptional items Exceptional items Total
2017 2017 2017 2016 2016 2016
£'000 £'000 £'000 £'000 £'000 £'000
Current tax
Current year 18,902 (1,756) 17,146 18,716 (767) 17,949
Adjustment for prior years (1,256) - (1,256) (946) - (946)
________ ________ ________ ________ ________ ________
17,646 (1,756) 15,890 17,770 (767) 17,003
________ ________ ________ ________ ________ ________
Deferred tax
Origination and reversal of temporary differences (457) (128) (585) (342) (148) (490)
Reduction in tax rate - - - 239 - 239
Adjustment for prior years (266) - (266) 397 - 397
________ ________ ________ ________ ________ ________
(723) (128) (851) 294 (148) 146
________ ________ ________ ________ ________ ________
Total income tax expense in income statement 16,923 (1,884) 15,039 18,064 (915) 17,149
======= ======= ======= ======= ======= =======
5. Earnings per share
Basic earnings per share
Basic earnings per share for the 52 weeks ended 30 December 2017 is calculated
by dividing profit attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the 52 weeks ended 30
December 2017 as calculated below.
Diluted earnings per share
Diluted earnings per share for the 52 weeks ended 30 December 2017 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 52 weeks ended 30 December 2017 as
calculated below.
Profit attributable to ordinary shareholders
2017 2017 2017 2016 2016 2016
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 64,884 (7,978) 56,906 62,255 (4,262) 57,993
======= ======= ======= ======= ======= =======
Basic earnings per share 64.5p (7.9p) 56.6p 62.0p (4.2p) 57.8p
Diluted earnings per share 63.5p (7.8p) 55.7p 60.8p (4.1p) 56.7p
Weighted average number of ordinary shares
2017 2016
Number Number
Issued ordinary shares at start of year 101,155,901 101,155,901
Effect of own shares held (510,293) (710,295)
__________ __________
Weighted average number of ordinary shares during the year 100,645,608 100,445,606
Effect of share options on issue 1,489,067 1,921,344
__________ __________
Weighted average number of ordinary shares (diluted) during the year 102,134,675 102,366,950
========= =========
6. Dividends
The following tables analyse dividends when paid and the year to which they
relate:
2017 2016
Per share Per share
pence pence
2015 final dividend - 21.2p
2016 interim dividend - 9.5p
2016 final dividend 21.5p -
2017 interim dividend 10.3p -
________ ________
31.8p 30.7p - Part 2: For the preceding part double click ID:nRSa9825Fa
- 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 regularly reviews the revenues of each segment separately but
receives information on profits, assets and liabilities on an aggregated basis
consistent with the Group accounts. Of the Group's revenue, £891,778,000
(2016: £835,786,000) was attributable to the retail segment.
3. Exceptional items
2017 2016
£'000 £'000
Cost of sales
Supply chain restructuring - redundancy costs 7,458 3,028
(403) -
- gain on property disposal
1,245 1,852
- depreciation and asset write-off
1,302 44
- transfer of operations
458 -
- property related
Prior year items - dilapidations - (557)
__________ __________
10,060 4,367
Distribution and selling
Supply chain restructuring - redundancy costs - 1,108
- - 356
transfer of operations
Prior year items - property related (198) (870)
__________ __________
(198) 594
Administrative expenses
Restructuring of support functions - 391
Prior year items - redundancy costs - (175)
__________ __________
- 216
________ ________
Total exceptional items 9,862 5,177
======= =======
Supply chain restructuring
This charge arises from the decisions, announced in 2016 and 2017, to invest
in and reshape the Company's supply chain in order to support future growth.
In 2017 the costs relate to the sale of one bakery site, including the gain on
disposal, redundancy costs relating to the consolidation of production
processes, accelerated depreciation and other contractual arrangements that
arise as a result of this consolidation. In 2016 the costs related to the
closure of three bakery sites and include redundancy and other
employment-related costs, asset write-offs, impairment and transfer and other
contractual obligations that arose as a result of the closure of the sites.
Restructuring of support functions
This charge related to redundancy costs arising from the restructuring of
bakery administration and payroll functions.
Prior year items
These relate to the movement on costs treated as exceptional in prior years
and arise from the settlement of various property and redundancy transactions.
4. Taxation
Recognised in the income statement
Excluding exceptional items Exceptional items Total Excluding exceptional items Exceptional items Total
2017 2017 2017 2016 2016 2016
£'000 £'000 £'000 £'000 £'000 £'000
Current tax
Current year 18,902 (1,756) 17,146 18,716 (767) 17,949
Adjustment for prior years (1,256) - (1,256) (946) - (946)
________ ________ ________ ________ ________ ________
17,646 (1,756) 15,890 17,770 (767) 17,003
________ ________ ________ ________ ________ ________
Deferred tax
Origination and reversal of temporary differences (457) (128) (585) (342) (148) (490)
Reduction in tax rate - - - 239 - 239
Adjustment for prior years (266) - (266) 397 - 397
________ ________ ________ ________ ________ ________
(723) (128) (851) 294 (148) 146
________ ________ ________ ________ ________ ________
Total income tax expense in income statement 16,923 (1,884) 15,039 18,064 (915) 17,149
======= ======= ======= ======= ======= =======
5. Earnings per share
Basic earnings per share
Basic earnings per share for the 52 weeks ended 30 December 2017 is calculated
by dividing profit attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the 52 weeks ended 30
December 2017 as calculated below.
Diluted earnings per share
Diluted earnings per share for the 52 weeks ended 30 December 2017 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 52 weeks ended 30 December 2017 as
calculated below.
Profit attributable to ordinary shareholders
2017 2017 2017 2016 2016 2016
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 64,884 (7,978) 56,906 62,255 (4,262) 57,993
======= ======= ======= ======= ======= =======
Basic earnings per share 64.5p (7.9p) 56.6p 62.0p (4.2p) 57.8p
Diluted earnings per share 63.5p (7.8p) 55.7p 60.8p (4.1p) 56.7p
Weighted average number of ordinary shares
2017 2016
Number Number
Issued ordinary shares at start of year 101,155,901 101,155,901
Effect of own shares held (510,293) (710,295)
__________ __________
Weighted average number of ordinary shares during the year 100,645,608 100,445,606
Effect of share options on issue 1,489,067 1,921,344
__________ __________
Weighted average number of ordinary shares (diluted) during the year 102,134,675 102,366,950
========= =========
6. Dividends
The following tables analyse dividends when paid and the year to which they
relate:
2017 2016
Per share Per share
pence pence
2015 final dividend - 21.2p
2016 interim dividend - 9.5p
2016 final dividend 21.5p -
2017 interim dividend 10.3p -
________ ________
31.8p 30.7p
======= =======
The proposed final dividend in respect of 2017 amounts to 22.0 pence per share
(£22,142,000). This proposed dividend is subject to approval at the Annual
General Meeting and has not been included as a liability in these accounts.
2017 2016
£'000 £'000
2015 final dividend - 21,326
2016 interim dividend - 9,610
2016 final dividend 21,768 -
2017 interim dividend 10,419 -
________ ________
32,187 30,936
======= =======
7. Related parties
The Group has a related party relationship with its subsidiaries, associates
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. Events after the reporting period
As noted in the financial review on page 12 the Company has, subsequent to the
year end, exchanged contracts for the disposal of the vacant Twickenham
site. The disposal is conditional on a number of factors, including the
application for and successful grant of planning permission, none of which are
expected to be resolved in the 2018 financial year, and therefore this asset
continues to be classified as non-current. At this stage the total proceeds
arising from supply chain site disposals are still expected to be in line with
those anticipated in the investment plan.
9. Principal risks and uncertainties
These risks are those which Directors consider to present the most significant
threat to the business' future development or performance. Additional risks
have been disclosed this year compared with previous statements. This is in
response to guidance from the Financial Reporting Council, along with a peer
review of the disclosures of other companies operating in the retail
environment, which has encouraged reporting of a broader range of risks to
enhance stakeholder understanding. As a result, we have reported on five
additional risks in the current disclosure. All risks reported in last
year's statement remain relevant.
Where appropriate, the impact of these risks occurring has been considered
when developing the scenarios tested as part of the financial viability
statement
The risks are described along with the movement in net risk level during the
year. They are ranked based on their perceived impact and likelihood, taking
into account the effectiveness of existing controls (i.e. the net risk faced
by the business).
Description Key mitigations Change
Loss of production
As we move towards more centralised production and national distribution, any All of our supply sites have contingency plans in place. We simulate No change
interruption to production may have a significant impact on our customers. scenarios and test our recovery processes periodically. We have identified
alternative supply sources for key ingredients and products. Our property
insurers conduct annual site inspections, helping us to protect our facilities
Product quality & safety
Due to our vertically-integrated structure, and the fact that we freshly Procedures are in place throughout our supply sites and shops to ensure that No change
prepare food every day in our retail premises, we may have a greater exposure food safety is maintained. Compliance is monitored both internally and by
to food safety risk than many of our competitors. regulatory bodies.
Food scare
We may suffer a loss of trade due to customer confidence being impacted by an Most of the products on sale in our shops are made by our staff in our No change
external food scare beyond our control. bakeries. Routine checks are carried out to confirm the integrity of our
products and ingredients.
Market pressures
Changing customer habits such as the increasing popularity of online shopping We are progressively diversifying the market segments in which we trade, No change
impact on our ability to attract footfall into our shops. reducing the reliance on shoppers. This includes opening shops in travel and
workplace locations as well as developing our food offer to match the needs of
customers outside of general shopping hours.
Business change
We continue to implement our strategy of transformation into a food-on-the-go We phase our change activity to avoid affecting the Company as a whole No change
retailer, requiring restructuring, capital investment and new systems wherever possible. Timelines and forecasts are clearly defined and agreed.
implementation. Progress against these is reported on a regular basis to our Operating Board.
Expected timelines or savings may not be met, and there may be disruption to
our customers.
Cyber & data security
As with all businesses, our data and systems are exposed to external threats We actively monitor our networks and systems, including conducting regular No change
such as hackers or viruses. These could lead to data breaches, or disruption penetration testing.
to our operation.
Our approach to information security is closely monitored by the Board.
The new General Data Protection Regulation (GDPR) provides a rigorous control
framework, with severe penalties for non-compliance. We are working to ensure compliance with the GDPR requirements, including data
mapping, policy development and staff training.
Consumer trends
As customers become more concerned about nutrition, health and the provenance We continue to work on improving the nutrition of our traditional products, No change
of food, our traditional products may be perceived as less attractive. The including a commitment to reduce sugar in line with the Government's Childhood
publication of the Government's 25 year Environmental Strategy and growing Obesity Strategy. Our "Balanced Choice" range provides healthier options and
concern over the environment may give rise to the introduction of additional is growing well.
levies and taxes.
We are working hard to reduce our impact on the environment, including
reviewing our packaging designs, introducing a reusable hot drinks cup and
continuing to reduce our carbon intensity.
Regulatory and compliance
Following the implementation of new Sentencing Council guidelines, large We have a system of controls and monitoring in place, and our teams are New
financial penalties could be imposed on the business for breaches of Food provided with extensive training on safe processes and procedures. Our audit
Safety or Health & Safety legislation. Due to the number of stores we processes confirm whether proper procedures are being followed.
operate, and the volume of customer transactions we handle on a daily basis,
we may be exposed to isolated incidents which fall below our expected
standards and may expose us to prosecution.
Economic
======= =======
The proposed final dividend in respect of 2017 amounts to 22.0 pence per share
(£22,142,000). This proposed dividend is subject to approval at the Annual
General Meeting and has not been included as a liability in these accounts.
2017 2016
£'000 £'000
2015 final dividend - 21,326
2016 interim dividend - 9,610
2016 final dividend 21,768 -
2017 interim dividend 10,419 -
________ ________
32,187 30,936
======= =======
7. Related parties
The Group has a related party relationship with its subsidiaries, associates
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. Events after the reporting period
As noted in the financial review on page 12 the Company has, subsequent to the
year end, exchanged contracts for the disposal of the vacant Twickenham site.
The disposal is conditional on a number of factors, including the application
for and successful grant of planning permission, none of which are expected to
be resolved in the 2018 financial year, and therefore this asset continues to
be classified as non-current. At this stage the total proceeds arising from
supply chain site disposals are still expected to be in line with those
anticipated in the investment plan.
9. Principal risks and uncertainties
These risks are those which Directors consider to present the most significant
threat to the business' future development or performance. Additional risks
have been disclosed this year compared with previous statements. This is in
response to guidance from the Financial Reporting Council, along with a peer
review of the disclosures of other companies operating in the retail
environment, which has encouraged reporting of a broader range of risks to
enhance stakeholder understanding. As a result, we have reported on five
additional risks in the current disclosure. All risks reported in last year's
statement remain relevant.
Where appropriate, the impact of these risks occurring has been considered
when developing the scenarios tested as part of the financial viability
statement
The risks are described along with the movement in net risk level during the
year. They are ranked based on their perceived impact and likelihood, taking
into account the effectiveness of existing controls (i.e. the net risk faced
by the business).
Description Key mitigations Change
Loss of production
As we move towards more centralised production and national distribution, any interruption to production may have a significant impact on our customers. All of our supply sites have contingency plans in place. We simulate scenarios and test our recovery processes periodically. We have identified alternative supply sources for key ingredients and products. Our property insurers conduct annual site inspections, helping us to protect our facilities No change
Product quality & safety
Due to our vertically-integrated structure, and the fact that we freshly prepare food every day in our retail premises, we may have a greater exposure to food safety risk than many of our competitors. Procedures are in place throughout our supply sites and shops to ensure that food safety is maintained. Compliance is monitored both internally and by regulatory bodies. No change
Food scare
We may suffer a loss of trade due to customer confidence being impacted by an external food scare beyond our control. Most of the products on sale in our shops are made by our staff in our bakeries. Routine checks are carried out to confirm the integrity of our products and ingredients. No change
Market pressures
Changing customer habits such as the increasing popularity of online shopping impact on our ability to attract footfall into our shops. We are progressively diversifying the market segments in which we trade, reducing the reliance on shoppers. This includes opening shops in travel and workplace locations as well as developing our food offer to match the needs of customers outside of general shopping hours. No change
Business change
We continue to implement our strategy of transformation into a food-on-the-go retailer, requiring restructuring, capital investment and new systems implementation. We phase our change activity to avoid affecting the Company as a whole wherever possible. Timelines and forecasts are clearly defined and agreed. Progress against these is reported on a regular basis to our Operating Board. No change
Expected timelines or savings may not be met, and there may be disruption to our customers.
Cyber & data security
As with all businesses, our data and systems are exposed to external threats such as hackers or viruses. These could lead to data breaches, or disruption to our We actively monitor our networks and systems, including conducting regular penetration testing.Our approach to information security is closely monitored by the Board.We are working to ensure compliance with the GDPR requirements, including data mapping, policy development and staff training. No change
operation.The new General Data Protection Regulation (GDPR) provides a rigorous control framework, with severe penalties for non-compliance.
Consumer trends
As customers become more concerned about nutrition, health and the provenance of food, our traditional products may be perceived as less attractive. The publication of We continue to work on improving the nutrition of our traditional products, including a commitment to reduce sugar in line with the Government's Childhood Obesity Strategy. Our "Balanced Choice" range provides healthier options and is growing well.We are working hard to reduce our impact on the environment, including reviewing our packaging designs, introducing a reusable hot drinks cup and No change
the Government's 25 year Environmental Strategy and growing concern over the environment may give rise to the introduction of additional levies and taxes. continuing to reduce our carbon intensity.
Regulatory and compliance
Following the implementation of new Sentencing Council guidelines, large financial penalties could be imposed on the business for breaches of Food Safety or Health & We have a system of controls and monitoring in place, and our teams are provided with extensive training on safe processes and procedures. Our audit processes confirm whether proper procedures are being followed. New
Safety legislation. Due to the number of stores we operate, and the volume of customer transactions we handle on a daily basis, we may be exposed to isolated incidents
which fall below our expected standards and may expose us to prosecution.
Economic climate
Increased uncertainty about the economy and the outcome of Brexit impacts on consumer confidence. Wider economic uncertainty and job insecurity may cause consumers to be more cautious with their discretionary spending. As a leading value brand, we take steps to control our costs whilst maintaining the quality of our customer offer. We closely monitor our competitiveness and are focused New
on remaining great value for money.
Management of third party relationships
As our reliance on third parties for services, ingredients or business support increases, we become more exposed to their business interruption risks. This could impact on our ability to produce, distribute or sell our products. Our own contingency arrangements consider the implications of key systems or ingredients being unavailable. All third parties are vetted prior to us engaging with them. New
Key supplier relationships are managed by our central procurement team.
Ability to attract / retain / motivate people
Market forces and particularly the impact of Brexit may result in a shortage of available workforce. This may be compounded by the relative complexity of our shop operations compared with other retailers. We offer attractive remuneration and benefit packages to reward our teams, along with training and development opportunities. We carry out an annual opinion survey to New
ensure high levels of employee engagement.We are working to streamline our shop processes and simplify operations for our teams.As part of our business change programme,
we are investing in improved recruitment processes.
Impact of Brexit
In addition to the risks relating to the economy and resources highlighted above, there is uncertainty regarding the possibility of changes to trading arrangements, customs agreement, tariffs etc. This may give rise to increased costs. Developments continue to be monitored, with regular review by our Operating Board. Contingency arrangements are being considered. New
10. Alternative Performance Measures
The Group uses alternative performance measures ('APM's) which, although
financial measures of either historical or future performance, financial
position or cash flows, are not defined or specified by IFRSs. The Directors
use a combination of these APMs and IFRS measures when reviewing the
performance, position and cash of the Group. The APMs in respect of
pre-exceptional results are reconciled in the Income Statement and Notes 3 and
5.
Calculations for LFL and ROCE are shown below:
Like-for-like (LFL) sales growth - compares year-on-year cash sales in our
company-managed shops, excluding any shops which opened, relocated or closed
in the current or prior year and is calculated as follows:
2017 2016
£'000 £'000
Current year LFL sales 817,533 777,204
Prior year LFL sales 788,510 745,609
________ ________
Growth 29,023 31,595
======== ========
Like-for like sales growth percentage 3.7% 4.2%
Return on capital employed - calculated by dividing profit before tax by the
average total assets less current liabilities for the year.
2017 2017 2016 2016
Underlying Including exceptional items Underlying Including exceptional items
£'000 £'000 £'000 £'000
Profit before tax 81,807 71,945 80,319 75,142
======= ======= ======= =======
Capital employed:
Opening 294,536 294,536 277,622 277,622
Closing 313,340 313,340 294,536 294,536
------------- ------------- ------------- -------------
Average 303,938 303,938 286,079 286,079
======= ======= ======= =======
Return on capital employed 26.9% 23.7% 28.1% 26.3%
This information is provided by RNS
The company news service from the London Stock Exchange
climate
Increased uncertainty about the economy and the outcome of Brexit impacts on As a leading value brand, we take steps to control our costs whilst New
consumer confidence. Wider economic uncertainty and job insecurity may cause maintaining the quality of our customer offer. We closely monitor our
consumers to be more cautious with their discretionary spending. competitiveness and are focused on remaining great value for money.
Management of third party relationships
As our reliance on third parties for services, ingredients or business support Our own contingency arrangements consider the implications of key systems or New
increases, we become more exposed to their business interruption risks. This ingredients being unavailable. All third parties are vetted prior to us
could impact on our ability to produce, distribute or sell our products. engaging with them. Key supplier relationships are managed by our central
procurement team.
Ability to attract / retain / motivate people
Market forces and particularly the impact of Brexit may result in a shortage We offer attractive remuneration and benefit packages to reward our teams, New
of available workforce. This may be compounded by the relative complexity of along with training and development opportunities. We carry out an annual
our shop operations compared with other retailers. opinion survey to ensure high levels of employee engagement.
We are working to streamline our shop processes and simplify operations for
our teams.
As part of our business change programme, we are investing in improved
recruitment processes.
Impact of Brexit
In addition to the risks relating to the economy and resources highlighted Developments continue to be monitored, with regular review by our Operating New
above, there is uncertainty regarding the possibility of changes to trading Board. Contingency arrangements are being considered.
arrangements, customs agreement, tariffs etc. This may give rise to
increased costs.
10. Alternative Performance Measures
The Group uses alternative performance measures ('APM's) which, although
financial measures of either historical or future performance, financial
position or cash flows, are not defined or specified by IFRSs. The Directors
use a combination of these APMs and IFRS measures when reviewing the
performance, position and cash of the Group. The APMs in respect of
pre-exceptional results are reconciled in the Income Statement and Notes 3 and
5.
Calculations for LFL and ROCE are shown below:
Like-for-like (LFL) sales growth - compares year-on-year cash sales in our
company-managed shops, excluding any shops which opened, relocated or closed
in the current or prior year and is calculated as follows:
2017 2016
£'000 £'000
Current year LFL sales 817,533 777,204
Prior year LFL sales 788,510 745,609
________ ________
Growth 29,023 31,595
======== ========
Like-for like sales growth percentage 3.7% 4.2%
Return on capital employed - calculated by dividing profit before tax by the
average total assets less current liabilities for the year.
2017 2017 2016 2016
Underlying Including exceptional items Underlying Including exceptional items
£'000 £'000 £'000 £'000
Profit before tax 81,807 71,945 80,319 75,142
======= ======= ======= =======
Capital employed:
Opening 294,536 294,536 277,622 277,622
Closing 313,340 313,340 294,536 294,536
------------- ------------- ------------- -------------
Average 303,938 303,938 286,079 286,079
======= ======= ======= =======
Return on capital employed 26.9% 23.7% 28.1% 26.3%
This information is provided by RNS
The company news service from the London Stock Exchange
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