REG - Inspecs Group PLC - Final Results
10/04/2025 07:00
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RNS Number : 4112E Inspecs Group PLC 10 April 2025
10 April
2025
INSPECS Group plc
("INSPECS", the "Company" or the "Group")
Preliminary unaudited results for the year ended 31 December 2024
Focused on delivering operational efficiencies and strategic execution;
introduction of medium term targets
INSPECS Group plc, a leading designer, manufacturer, and distributor of
eyewear (sunglasses, optical frames, lenses and low vision products) today
announces its unaudited preliminary results for the year ended 31 December
2024.
Financial Highlights
· Group revenue of £198.3m (2023: £203.3m)
· Group revenue on a constant exchange rate basis(1) of £203.2m (2023:
£203.3m)
· Gross profit margin up 130 bps to 52.2% (2023: 50.9%)
· Underlying EBITDA(1) down £0.4m to £17.6m (2023: £18.0m)
· Operating profit up £0.5m to £3.4m (2023: £2.9m)
· Cash flows from operating activities down £2.7m to £14.2m (2023:
£16.9m)
· Net debt excluding leasing reduced by £1.3m to £22.9m (2023:
£24.2m)
Operational Highlights and Current Trading
· Distribution agreed for key new brands into leading retailers across
the USA, Canada and Europe
· Completion of the Group's new state-of-the-art manufacturing facility
in Vietnam
· The integration of our US businesses completed in the year
· Group centralised procurement generating supply chain efficiencies
· Launch of a new optics product 'Optaro', being a video magnifier
specifically made for smartphones
· Operational efficiency drive is delivering pleasing results
· Pallet programmes to major US and Canadian chains secured in 2024 for
delivery H1 2025
· New finance facilities put in place until 2027 with improved terms
· First quarter 2025 trading in line with expectations
Tariffs
The ongoing tariff situation remains fast-paced, and management continues to
monitor closely. Whilst it presents uncertainty for the year ahead,
mitigations include:
· The tariffs are based on the landed value of the products, which will
not materially affect the price to the end consumer and therefore this is not
expected to impact current consumer demand.
· Our non-US based businesses are not currently affected by the recent
changes in tariffs, and the Group is confident that the continuing focus on
supply chain efficiencies, reducing operational expenditure and selective pass
through of cost increases to preserve margins across key markets will largely
mitigate the effects of these new tariffs.
Introduction of medium-term targets
The Board is pleased to set out the Group's medium-term ambition to deliver:
· CAGR organic revenue growth 40% above the market rate, which is
currently forecast to grow at 3% CAGR over the next 5 years(2)
· Double digit underlying EBITDA %
· Net debt to be 40% - 75% of underlying EBITDA
1. Constant exchange rates and Underlying EBITDA are non-statutory measures.
Please refer to note 4 for details.
2. Market Benchmark: Based on Statista Eyewear: Market Data & Analysis,
covering Sunglasses and Eyewear Frames revenue projections.
Richard Peck, Chief Executive Officer of INSPECS Group plc, commented:
"INSPECS demonstrated resilience in 2024 despite challenging macroeconomic
conditions, with revenue declining by 2.5% to £198.3m due to softer consumer
demand and competitor consolidation. However, our continued focus throughout
the year on the integration and simplification of our business has been
significant.
"We successfully got our new factory in Vietnam up and running, which has
significantly improved our capacity. We also strengthened our brand portfolio
by introducing several new brands and expanding our existing ones, all the
while working on our supply chain and efficiencies. Additionally, we have
focused on growing our customer base in key markets. These strategic
initiatives allowed us to improve our margins, maintain our administrative
costs in an inflationary environment, and reduce our net debt, setting us up
well for the future.
"The first quarter has laid the groundwork for a pivotal year and as we move
forward, the focus remains on sharpening efficiency, streamlining operations,
and advancing key initiatives. Notwithstanding the recently announced tariffs
and caution in relation to market conditions, compelling new projects in the
pipeline give us confidence in delivering on market expectations for 2025 and
our medium-term ambition to accelerate revenue growth, deliver double digit
Underlying EBITDA whilst targeting net debt of 40%-75% of Underlying EBITDA."
For further information please contact:
INSPECS Group plc via FTI Consulting
Richard Peck (CEO) Tel: +44 (0) 20 3727 1000
Chris Kay (CFO)
Peel Hunt (Nominated Adviser and Broker) Tel: +44 (0) 20 7418 8900
George Sellar
Andrew Clark
FTI Consulting (Financial PR) Tel: +44 (0) 20 3727 1000
Alex Beagley
Harriet Jackson
Amy Goldup
About INSPECS Group plc
INSPECS is a leading provider of eyewear solutions to the global eyewear
market. The Group produces a broad range of eyewear frames, low vision aids
and lenses, covering optical, sunglasses and safety, which are either
"Branded" (under licence or under the Group's own proprietary brands), or
"OEM" (unbranded or private label on behalf of retail customers).
INSPECS is building a global eyewear business through its vertically
integrated business model. Its continued growth is underpinned by increasing
the penetration of its own-brand portfolio, worldwide distribution, growing
retail presence, maximising group synergies and its global network, expanding
its manufacturing capacity and scaling the research and development department
as it develops new and innovative eyewear products. The Group has operations
across the globe: with offices and subsidiaries in the UK, Germany, Portugal,
Scandinavia, the US and China (including Hong Kong, Macau and Shenzhen), and
manufacturing facilities in Vietnam, China, the UK and Italy.
INSPECS customers are global optical and non-optical retailers, global
distributors and independent opticians. Its distribution network covers over
80 countries and reaches approximately 75,000 points of sale.
More information is available at: https://INSPECS.com (https://inspecs.com)
CHAIRMAN'S STATEMENT
Performance highlights
Despite ongoing macroeconomic headwinds, INSPECS has remained focused on
delivering operational efficiency and strategic execution. Revenue for the
year reduced by £5.0m against prior year to £198.3m, reflecting a weaker
than anticipated consumer demand in key markets and the impact of customer
consolidation. Our disciplined cost management and efficiency improvements
resulted in a 130-basis point improvement in gross profit margin however our
revenue performance, combined with increased losses in our Lenses segment, led
to a £0.4m reduction in Underlying EBITDA to £17.6m.
Our vertically integrated business model continues to provide significant
advantages, enabling us to maintain operational efficiency across our global
supply chain. The integration of past acquisitions is now largely complete,
delivering synergies that are contributing to both revenue protection and
margin improvements. Furthermore, our investment in sustainable production
methods reinforces our leadership in ethical and environmentally responsible
eyewear solutions.
Our strategic focus on mid-market and premium eyewear remains well aligned
with consumer preferences for quality, craftsmanship, and sustainability. This
has supported the development of new partnerships with leading global
retailers while also driving direct-to-consumer growth.
Strategic developments in 2024
Throughout 2024, we remained focused on the six key pillars that guide our
strategy: vertical integration, worldwide distribution, innovation, growth,
global network and fit for the future.
- Vertical integration: Investments in automation and digital
transformation have driven production efficiencies and quality enhancements.
These improvements have also mitigated cost pressures from inflationary trends
and supply chain disruptions.
- Worldwide distribution: We continued to expand in key growth
markets, particularly in North America, with revenue from this region
increasing by 4.0%.
- Innovation: We introduced several new eyewear designs, including
collaborations with globally recognised fashion brands, broadening our
portfolio and engaging new customer segments. Our R&D investments
in smart eyewear technology have also delivered promising early-stage
results, positioning INSPECS at the forefront of industry innovation.
- Growth: Expansion of our omnichannel retail presence has improved
the customer experience, integrating in-store and online shopping. We continue
to invest in our direct-to-consumer e-commerce platforms.
- Global Network: We remain committed to identifying acquisitions
that align with our existing portfolio.
- Fit for the future: We are always looking at ways to improve our
climate goals, and with that in mind, we are setting a clear new target: a 40%
reduction in our global Scope 1 and Scope 2 emissions by 2040, using 2023 as
our base year. This shifts our focus from our previous goal of carbon-neutral
operations by 2030 to making deeper, more direct emissions reductions. At the
same time, we are staying committed to sustainability by ensuring that by
2030, all our packaging will be recyclable, reusable, biodegradable, or made
from biobased materials.
Outlook for 2025
Looking ahead, demand for eyewear, particularly in the mid-to-premium and
sustainable categories, remains robust, supported by trends such as increasing
health awareness and global demand for optical correction. We expect to
realise further benefits from investments made since our IPO in 2020,
particularly in our expanded manufacturing capabilities and distribution
networks. Plans for additional expansion into underpenetrated regions such as
Latin America, the Middle East, and Southeast Asia present significant
opportunities for growth.
Our commitment to innovation and responsible design remains unwavering. In
2025, we plan to introduce new eyewear collections with thoughtfully sourced
materials and accelerate progress on integrating smart technology into our
product lines. Additionally, we will leverage data analytics to enhance our
understanding of customer preferences, ensuring our offerings remain aligned
with evolving consumer needs.
Operational priorities for 2025 include reinforcing supply chain resilience,
maintaining strict cost discipline, and increasing the proportion of our
Group's procurement from in-house manufacturing rather than third-party
suppliers. While macroeconomic headwinds such as inflation and currency
volatility remain risks, we are confident that our business model and
strategic agility will enable us to effectively navigate these challenges.
As per our communication to the market on 20 December 2024, I intend to step
down as Executive Chairman at the conclusion of the company's AGM pending the
outcome of the ongoing search for a new Non-Executive Chair.
I would like to take this opportunity to express my gratitude to our
leadership team and employees worldwide for their dedication and hard work
throughout 2024. Their efforts have been instrumental in driving our progress.
To our stakeholders, thank you for your continued support and confidence in
our vision.
As we enter 2025, I am confident that INSPECS is on a strong growth
trajectory, equipped with the right strategy, talent, and resources to
capitalise on emerging opportunities.
Robin Totterman
Executive Chairman
CHIEF EXECUTIVE'S REVIEW
Overall Performance
Starting with our financial performance, the Group delivered revenue of
£198.3m, down from £203.3m the previous year. On a constant currency basis,
the Group's revenue was £203.2m. Despite a difficult first half, revenue in
the second half of the year increased 3.4%, from the previous year, to
£95.3m. Underlying EBITDA decreased to £17.6m from £18.0m.
We continued to generate positive cashflow in the year and reduced our net
debt by £1.3m to £22.9m, even after investing in a new factory and paying
deferred consideration on previous acquisitions. In December, we successfully
refinanced our banking arrangements with HSBC UK Bank plc. The new loan
facilities, maturing in 2027, are expected to reduce interest costs starting
in 2025 and continuing thereafter.
Frames and Optics
Our Frames and Optics segment performance in the USA, Canada and the UK was
robust. However, as highlighted through the year, we did experience a softer
market in Europe, which impacted our overall performance. Whilst the segment
saw a dip in sales from £179.0m to £172.2m, improvements in gross margin
helped mitigate the impact on Underlying EBITDA.
The team has focused on operational and strategic initiatives through the
year. Our strategy to grow by introducing our brands into more markets, while
continuously simplifying our business operations, has shown promising results.
The launch of a new brand, Barbour, globally has been very well received in
the market.
We have made significant developments in centralising our procurement
processes, with a dedicated global team delivering synergies. The integration
of our US businesses completed in the year, streamlining our operations under
a single team, which has already delivered efficiencies and enhanced
performance.
In regard to brand portfolio highlights, we were excited to announce the
addition of a new brand, Tom Tailor, in August 2024. Our house brand,
Titanflex, has continued to deliver strong results this year with a record
number of sales. In Q4 Eschenbach Optiks successfully launched a revolutionary
low vision aid - a video smartphone magnifier, which was well received by the
market.
Manufacturing
Revenue from our manufacturing segment was £20.7m, compared to £20.2m in
2023. A major highlight of the year was the completion of the Group's new,
state-of-the-art manufacturing facility in Vietnam. This expansion of
manufacturing capability, which is now fully operational, has significantly
increased our capacity allowing the Group to be able to produce an additional
5 million units per year in the future.
Lenses
Our Lenses segment grew its revenue by 18.2%. Despite this growth in sales,
operationally the business increased its losses by £0.5m. Our satellite
businesses have been merged into our main production facility in early 2025
to reduce operational overheads and we are currently carrying out a strategic
review of the business which is expected to be concluded by June 2025.
ESG
In 2024, we maintained our focus on ESG across our operations, remaining
committed to aligning with UK mandatory climate-related financial disclosures
and meeting stakeholder expectations. We have shifted from a carbon-neutral
goal to a 40% emissions reduction target, focusing more on direct reductions
to our carbon footprint. As we move forward, we remain dedicated to regularly
reviewing and refining our ESG strategy to drive meaningful progress across
our global operations.
Our role within the community remains important to us, and we continue to
foster strong partnerships with charities and non-profit organisations, both
in the UK and internationally. In 2024, we proudly supported various
initiatives, including the food bank project at Eschenbach, Sight Support
Southwest with INSPECS Ltd, and the local food support programme at Tura.
Current trading and outlook
Looking ahead, we remain committed to growth with several key initiatives this
year. We will introduce Tom Tailor, a significant brand in eyewear with
Eschenbach in Europe. In Asia, production in our factories is ramping up,
which will allow us to manufacture more products for our customers. In
February, we attended the world's largest optical fair in Italy, where we
received strong interest in our new Vietnam factory. We delivered solid growth
in H2 2024 and I am pleased to report that our current trading is in line with
expectations, giving the Board confidence in delivering growth in revenue,
margins and profits in 2025.
In addition to these efforts, we are focusing on enhancing our technological
capabilities to stay ahead in the market. We are investing in digital
transformation initiatives to improve our supply chain efficiency and customer
experience. Our commitment to innovation remains steadfast, and we are
exploring new product lines and services to diversify our offerings. We
believe that these strategic moves will position us well for sustained growth
and success in the coming years.
Richard Peck
Chief Executive Officer
CHIEF FINANCIAL OFFICER'S REVIEW
Group sales for the year of £198.3m was a decrease of 2% on the previous
year's sales of £203.3m. On a constant currency basis* our sales of £203.2m
were flat on the previous year's sales of £203.3m.
The Group's Operating Profit increased from £2.9m to £3.4m.
The Group's Underlying EBITDA decreased by 2% in the year from £18.0m in 2023
to £17.6m.
Reported loss before tax of £1.0m (FY23: Profit before tax £0.2m) is after
incurring non-underlying costs (net) £0.5m (FY23: £0.1m), exchange
adjustments on borrowings £0.1m (FY23: £1.3m) and net finance costs of
£4.0m (FY23: £3.9m).
*Constant exchange rates: figures at constant exchange rates have been
calculated using the average exchange rates in effect for the corresponding
period in the relevant comparative year.
FY24 FY23
£'000 £'000
Revenue 198,258 203,292
Gross profit 103,451 103,547
Underlying operating expenses (85,869) (85,508)
Underlying EBITDA 17,582 18,039
Share-based payments (371) (972)
Depreciation and amortisation (12,817) (13,039)
Earnout on acquisitions (981) (1,140)
Operating profit before non-underlying costs 3,413 2,888
Reconciliation to reported results
Operating profit before non-underlying costs 3,413 2,888
Non-underlying costs (net) (468) (58)
Exchange adjustments on borrowings 97 1,312
Share of loss of associate and joint venture (29) (12)
Net finance costs (4,036) (3,915)
(Loss)/profit before tax (1,023) 215
Tax charge (3,585) (1,212)
Loss after tax (4,608) (997)
REVENUE
Total revenue for the year was £198.3m, decreasing by 2% from £203.3m in
2023. On a constant currency basis, revenue remained flat, at £203.2m in 2024
and £203.3m in 2023.
GROSS MARGIN
The Group's gross profit margin for 2024 was 52.2% compared to 50.9% in 2023,
an increase of 130 basis points. The Group continues to focus with its new
procurement team on supply chain efficiencies.
UNDERLYING EBITDA
The Group considers Underlying EBITDA as one of its key operating performance
indicators. Our Underlying EBITDA decreased by £0.4m, from £18.0m to
£17.6m, a decrease of 2%. Underlying EBITDA margin remained flat at 8.9%
during the year. Our Underlying EBITDA performance reflects the decrease in
sales in 2024 from 2023.
OPERATING EXPENSES
Operating expenses decreased from £100.7m to £100.0m in 2024 despite cost
inflation on wages, salaries and operating costs. The Group will continue to
seek further operational cost savings in 2025.
Year Ended Year Ended Percentage change
31 December 2024 31 December 2023
£'000 £'000
Revenue 198,258 203,292 -2.5%
Gross profit 103,451 103,547 -0.1%
Distribution 5,743 6,020 -4.6%
Employee expenses 53,012 52,690 0.6%
Administrative expenses, excluding employee expenses 41,283 41,949 -1.6%
Total operating expenses 100,038 100,659 -0.6%
The table below sets out our operating costs as a percentage of revenue.
Year Ended Percentage Year Ended Percentage
31 December 2024 of revenue 31 December 2023 of revenue
£'000 £'000
Revenue 198,258 - 203,292 -
Gross profit 103,451 52% 103,547 51%
Distribution 5,743 3% 6,020 3%
Employee expenses 53,012 27% 52,690 26%
Administrative expenses, 41,283 21% 41,949 21%
excluding employee expenses
(LOSS)/PROFIT BEFORE TAX
In 2024, the Group made a statutory loss before tax of £1.0m (FY23: profit
£0.2m), a decrease of £1.2m. The Group made an Underlying EBITDA of £17.6m
(FY23: £18.0m).
2024 2023
£m £m
Underlying EBITDA 17.6 18.0
Non-cash adjustments
1. Depreciation and amortisation (12.8) (13.0)
2. Exchange adjustments on borrowings 0.1 1.3
3. Share-based payments (0.4) (1.0)
4. Earnout on acquisitions (1.0) (1.1)
Sub-total 3.5 4.2
Non-underlying costs (0.5) (0.1)
Net finance costs (4.0) (3.9)
(Loss)/profit before tax (1.0) 0.2
KEY ITEMS IMPACTING THE CURRENT YEAR'S RESULTS ARE AS FOLLOWS:
Depreciation and amortisation
The Group's depreciation and amortisation charge is set out below.
Amortisation costs principally arise from the capitalisation of customer
relationships on acquisitions.
31 December 31 December
2024
2023
£m
£m
Depreciation 6.0 6.1
Amortisation 6.8 6.9
Total 12.8 13.0
Exchange adjustment on borrowings
The exchange adjustment on borrowings primarily relates to intragroup loans,
where the functional currency of the entities differs from the loan currency.
This exchange adjustment also relates to the revolving credit facility and
term loan held in Euros.
Share based payment expense
The Group has an LTIP scheme in place that vests over a period of three years
from the date of the grant of the option at market value, and is subject to
the continued employment of the individual over that period. The Group has
recognised a non-cash charge of £0.4m in 2024 (FY23: £1.0m). The scheme is
designed to give the equivalent of one year's salary to an individual over
that three-year period. The Remuneration and Nomination Committee have
approved the issue of further options, with this expected following the
announcement of the 2024 results.
Earnout on acquisitions
The acquisitions of EGO Eyewear and BoDe Designs in December 2021 both
contained amounts due for contingent consideration, based on the performance
of those businesses. In 2024, the amount of contingent consideration
recognised under the agreements amounted to £1.0m (FY23: £1.1m) and has been
charged to the profit and loss account in accordance with IFRS 3.
Net finance costs
Total net finance costs of £4.0m remained in line with 2023. On 13 December
2024 the Group repaid its previous multicurrency term loan and revolving
credit facility with HSBC. At the same time, the Group entered into a new term
loan and multicurrency revolving credit facility with HSBC. The Group's
multicurrency facility has now been drawn down in Euros with the interest rate
charge based on Euribor rather than Sonia. On 13 December the Sonia rate was
4.7%, the Euribor rate was 2.9%. The new facilities were put in place to
reduce net finance costs over the term of the new facilities. The amortisation
of loan transaction costs relates to the refinancing charges that are
amortised over the period of the financing facilities available to the Group.
2024 £m 2023 £m
Bank Loan Interest 3.1 3.4
Invoice Discounting 0.3 0.1
IFRS 16 lease interest 0.6 0.5
Interest Receivable (0.2) (0.2)
Net Finance Cost 3.8 3.8
Amortisation of loan transaction costs 0.2 0.1
Total net finance costs 4.0 3.9
Non-underlying costs (net)
The Group incurred £0.5m of non-underlying costs (net) in 2024 (2023:
£0.1m). During the year the Group incurred restructuring costs of £0.4m
which included the integration of INSPECS USA and Tura. The Group incurred a
provision charge of £0.3m (2023: £nil) in relation to pre-acquisition
withholding tax. The Group also recognised a non-underlying gain of £0.2m in
relation to the sale of the Magdala Road site.
CASH FLOWS
During the year, the Group generated £7.2m in net cash flows from operating
activities after tax and interest (2023: £12.7m). An analysis of how the
Group has deployed its free cash flow in the year is set out below.
31 December 31 December
2024 2023
£'000 £'000
Cash and cash equivalents at the beginning of year 20,070 22,153
Net cash from operating activities 7,199 12,665
Net cash used in investing activities (2,518) (6,183)
Net cash used in financing activities (426) (8,835)
Increase/(decrease) in cash and cash equivalents 4,255 (2,353)
Foreign exchange rate (loss)/gain (365) 270
Cash and cash equivalents including overdrafts at the year end 23,960 20,070
The breakdown of net cash used in investing activities is
Purchase of intangible fixed assets (964) (1,248)
Purchase of property, plant and equipment (1,956) (4,502)
Proceeds from disposals of property, plant and equipment 1,025 -
Cash paid in relation to deferred consideration (700) (673)
Acquisition of subsidiaries, including overdraft acquired (124) -
Interest received 201 240
Net cash used in investing activities (2,518) (6,183)
WORKING CAPITAL
The Group monitors its working capital position to ensure that it has
sufficient resources to meet its day-to-day requirements and to fund further
investing activities to supply its customer base.
Receivables
The Group closely monitors its receivable due days to ensure that amounts
overdue more than 30 days are kept to a minimum balance.
Year ended 31 December 2024 Year ended 31 December 2023
Total Current <30 days overdue >30 days overdue Total Current <30 days overdue >30 days overdue
Receivables (£m) 28.3 19.0 4.3 5.0 24.2 15.2 3.2 5.8
Percentage 100 67 15 18 100 63 13 24
Inventory
Our sales to inventory ratio decreased from 5.0 to 4.6. The Group constantly
monitors its working capital position, with a view to increase the sales to
inventory ratio where possible.
31 December 31 December
2024 2023
£m
£m
Turnover 198.3 203.3
Inventory 42.8 40.9
Sales to inventory ratio 4.6 5.0
Current asset ratio
The current asset ratio is a liquidity ratio that measures a company's ability
to pay its short-term obligations, or those due within one year.
Year ended Year ended
31 December
31 December
2024 2023
£m
£m
Current assets 106.6 97.2
Current liabilities 75.1 65.9
Ratio 1.4 1.5
Quick ratio
The quick ratio is an indicator of a company's short-term liquidity position
and measures a company's ability to meet its short-term obligations with its
most liquid assets.
Year ended Year ended
31 December 2024
31 December 2023
£m
£m
Current assets 106.6 97.2
Less inventory (42.8) (40.9)
63.8 56.3
Current liabilities 75.1 65.9
Ratio 0.8 0.9
Net debt
The Group's closing net debt, including and excluding lease liabilities, is
shown below. During the year the Group decreased its net debt excluding leases
from £24.2m to £22.9m.
Year ended Year ended
31 December 2024
31 December 2023
£m £m
Cash at bank 24.0 20.1
Borrowings (46.8) (44.3)
Lease liabilities (15.7) (17.9)
Net debt (38.5) (42.1)
Net debt (excluding lease liabilities) (22.9) (24.2)
FINANCING
During the year, the Group refinanced its facilities with HSBC. The new loan
facilities, maturing in December 2027, have a leverage ceiling of 2.25, debt
service cover of 1.05 (increasing to 1.1 in December 2025) and an interest
cover of 3.0. The Group finances its operations through the following
facilities.
Amount Matures Drawn at
£m
31 December
2024
£m
Group revolving credit facility 29.8 December 2027 28.2
Term loans 9.9 December 2027 9.9
Revolving credit facility USA 8.0 1-year rolling 7.5
Invoice discounting 1.7 1-year rolling 1.7
Total 49.4 47.3
LEVERAGE (USING DEBT TO EQUITY RATIO)
The Group's leverage positions, calculated in the context of its banking
covenants, are shown below including and excluding operating lease
liabilities:
2024 2023
Including operating lease liabilities 1.64 1.70
Excluding operating lease liabilities 1.52 1.58
Required ratio 2.25 2.25
The Group's leverage is constantly updated, and a rolling projection for 12
months is reviewed to ensure compliance with the Group's covenants.
(LOSS)/EARNINGS PER SHARE
Year ended 31 December 2024 Basic weighted average number of Ordinary Shares ('000) Total (loss)/earnings (Loss)/
£'000 earnings
per share
(pence)
Basic loss per share 101,672 (4,608) (4.53)
Diluted loss per share 101,672 (4,608) (4.53)
Basic Underlying EPS 101,672 3,593 3.53
Diluted Underlying EPS 106,824 3,593 3.36
DIVIDEND
The Group does not intend to pay a dividend for the year ended 31 December
2024.
GOING CONCERN
The Directors have undertaken a comprehensive assessment of the Group's
ability to trade out to at least 30 June 2026. Taking this into consideration,
the Directors have a reasonable expectation that the Group have adequate
resources to continue to trade throughout the review period. Therefore, the
Directors continue to adopt the going concern basis in preparing the
consolidated financial statements.
Chris Kay
Chief Financial Officer
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2024
2024 2023
Notes £'000 £'000
REVENUE 5 198,258 203,292
Cost of sales (94,807) (99,745)
GROSS PROFIT 103,451 103,547
Distribution costs (5,743) (6,020)
Administrative expenses (94,295) (94,639)
OPERATING PROFIT 3,413 2,888
Non-underlying costs (net) 8 (468) (58)
Exchange adjustment on borrowings 97 1,312
Finance costs 9 (4,237) (4,155)
Finance income 9 201 240
Share of loss of associate and joint venture (29) (12)
(LOSS)/PROFIT BEFORE INCOME TAX (1,023) 215
Income tax charge 11 (3,585) (1,212)
LOSS FOR THE YEAR (4,608) (997)
Attributable to:
Equity holders of the Parent (4,608) (997)
Loss PER SHARE
Basic loss per share attributable to the equity holders of the Parent 12 (4.53)p (0.98)p
Diluted loss per share attributable to the equity holders of the Parent 12 (4.53)p (0.98)p
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2024
2024 2023
£'000 £'000
LOSS FOR THE YEAR (4,608) (997)
OTHER COMPREHENSIVE LOSS
Other comprehensive income that may be reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of foreign operations (594) (3,999)
OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF INCOME TAX (594) (3,999)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (5,202) (4,996)
Attributable to: Equity holders of the Parent (5,202) (4,996)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2024
2024 2023
Notes £'000 £'000
ASSETS
NON-CURRENT ASSETS
Goodwill 14 55,741 55,578
Intangible assets 23,406 29,813
Property, plant and equipment 18,276 19,001
Right-of-use assets 14,372 16,599
Investments in associate and joint venture 70 98
Deferred tax assets 1,738 2,826
113,603 123,915
CURRENT ASSETS
Inventories 42,753 40,848
Trade and other receivables 39,825 35,855
Tax receivables 18 107 386
Cash and cash equivalents 23,960 20,070
106,645 97,159
Assets held for sale - 832
TOTAL ASSETS 220,248 221,906
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 1,017 1,017
Share premium 15 89,508 89,508
Foreign currency translation reserve 15 4,841 5,435
Share option reserve 15 3,570 3,222
Merger reserve 15 5,340 5,340
Accumulated losses 15 (5,590) (1,005)
TOTAL EQUITY 98,686 103,517
LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities - borrowings
Interest-bearing loans and borrowings 16 44,505 48,234
Deferred consideration 17 - 652
Deferred tax liabilities 1,968 3,647
46,473 52,533
CURRENT LIABILITIES
Trade and other payables 41,269 36,375
Right of return liabilities 5 10,608 11,297
Financial liabilities - borrowings
Interest-bearing loans and borrowings 16 16,185 13,000
Invoice discounting 16 1,777 887
Deferred and contingent consideration 17 1,873 2,111
Tax payable 18 3,377 2,186
75,089 65,856
TOTAL LIABILITIES 121,562 118,389
TOTAL EQUITY AND LIABILITIES 220,248 221,906
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2024
Foreign
Called currency Share
up share Share translation option Accumulated Merger
capital premium reserve reserve losses reserve Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
BALANCE AT 1 JANUARY 2023 1,017 89,508 9,434 2,703 (461) 5,340 107,541
CHANGES IN EQUITY
Loss for the year - - - - (997) - (997)
Other comprehensive loss - - (3,999) - - - (3,999)
TOTAL COMPREHENSIVE LOSS - - (3,999) - (997) - (4,996)
Share-based payments - - - 972 - - 972
Share options forfeited - - - (453) 453 - -
BALANCE AT 31 DECEMBER 2023 1,017 89,508 5,435 3,222 (1,005) 5,340 103,517
CHANGES IN EQUITY
Loss for the year - - - - (4,608) - (4,608)
Other comprehensive loss - - (594) - - - (594)
TOTAL COMPREHENSIVE LOSS - - (594) - (4,608) - (5,202)
Share-based payments - - - 371 - - 371
Share options forfeited - - - (23) 23 - -
BALANCE AT 31 DECEMBER 2024 1,017 89,508 4,841 3,570 (5,590) 5,340 98,686
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
2024 2023
Notes £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES 13 14,186 16,914
Interest paid (4,106) (3,647)
Tax paid (2,881) (602)
NET CASH FROM OPERATING ACTIVITIES 7,199 12,665
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible fixed assets (964) (1,248)
Purchase of property, plant and equipment (1,956) (4,502)
Proceeds from disposals of property, plant and equipment 1,025 -
Acquisition of subsidiaries, including overdraft acquired (124) -
Cash paid in relation to deferred consideration (700) (673)
Interest received 201 240
NET CASH USED IN INVESTING ACTIVITIES (2,518) (6,183)
CASH FLOW FROM FINANCING ACTIVITIES
New bank loans in the year 39,451 -
Bank loan principal repayments in year (36,890) (4,014)
Transaction costs on debt refinancing (275) (70)
Movement in invoice discounting facility 890 (603)
Principal payments on leases (3,602) (4,148)
NET CASH USED IN FINANCING ACTIVITIES (426) (8,835)
Increase/(decrease) in cash and cash equivalents 4,255 (2,353)
Cash and cash equivalents at beginning of the year 20,070 22,153
Foreign exchange rate (loss)/gain (365) 270
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 23,960 20,070
Notes
1. GENERAL INFORMATION
INSPECS Group plc is a public company limited by shares and is incorporated in
England and Wales (company number 11963910). The address of the Company's
principal place of business is 7-10 Kelso Place, Upper Bristol Road, Bath BA1
3AU.
The principal activity of the Group in the year was that of design,
production, sale, marketing and distribution of high fashion eyewear, lenses
and OEM products worldwide.
2. ACCOUNTING POLICIES
Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with UK
adopted international accounting standards, and those parts of the Companies
Act 2006 applicable to companies reporting under UK adopted international
accounting standards.
The Consolidated Financial Statements have been prepared on a historical cost
basis, except where fair value measurement is required under IFRS as described
below in the accounting policies.
Going concern
The financial statements have been prepared on a going concern basis, as the
Directors reasonably expect the Group to continue operating and meeting its
obligations to 30 June 2026.
The Group's borrowings totalled £46.8m (including invoice financing) with a
net debt position of £22.9m (excluding leases) on 31 December 2024. These
borrowings are subject to three key covenants: leverage, cash flow cover, and
interest cover ratios, assessed on a 12-month rolling basis for each relevant
period. The financing facilities have a three-year term, with two one-year
extension options.
A breach in the cash flow cover covenant as of 31 March 2025 was identified,
which was caused by accelerated payments to suppliers. Controls over
subsidiary bank accounts have been strengthened such that a breach of a
similar nature cannot reoccur. The breach was formally waived by HSBC on 9
April 2025, and no further covenant breaches or liquidity challenges are
expected through the going concern period.
To evaluate financial resilience, the Board considered three scenarios:
Base Case
· The Base Case reflects the Board-approved budget, updated with
actual trading data up to 31 March 2025.
· The budget assumes conservative growth and enhanced cost controls
within the Group.
· Market conditions remain resilient, with trading aligning with
expectations.
· The Group anticipates maintaining its budgeted margin throughout
2025.
· No further covenant breaches or liquidity challenges are
anticipated.
Severe but Plausible Downside Scenario
· This scenario assumes a 10% monthly revenue reduction from 1
April 2025 onward.
· The Directors consider this 10% reduction appropriately
conservative, given the current trading position, declining global inflation,
and increasing consumer confidence.
· The model incorporates cost-saving measures wholly within
managements control, including reductions in employee bonuses, commissions,
and discretionary operational spending.
· No further covenant breaches or liquidity challenges are
anticipated.
Reverse Stress Test
· This scenario models a 28% decline in forecast revenue from 1
April 2025, with gross margins maintained.
· Such a decline would significantly surpass historical reductions
and result in a breach of cash flow cover in the June 2026 reporting period.
· This scenario includes some cost-saving measures wholly within
management's control would include reductions in employee expenses, headcount,
and discretionary operating costs.
· The analysis focused on covenant compliance risks rather than
liquidity constraints, as the Group would breach covenants before encountering
cash flow shortfalls.
· In the event of a severe revenue decline, the Group could
implement additional cost-saving initiatives and, whilst not wholly within
management's control, could explore covenant amendments or waivers with its
banking partners.
· Given current business momentum, the Directors consider this
scenario to be a remote possibility.
The Board has reflected on the likely effects of the recent announced
increases in tariffs: The majority of US eyewear is supplied from Chinese
manufacturing. In the short to medium term, the Board's view is that it is
unlikely that the shape of this supply chain will alter in the face of these
changes. The tariffs are based on the landed value of the products, which will
not materially affect the price to the end consumer and therefore this is not
expected to impact current consumer demand.
Our non-US based businesses are not currently affected by the recent changes
in tariffs, and the Group is confident that the continuing focus on supply
chain efficiencies, reducing operational expenditure and selective pass
through of cost increases to preserve margins across key markets will largely
mitigate the effects of these new tariffs..
Based on these assessments, the Board has a reasonable expectation that the
Group has sufficient resources to continue operating as a going concern and to
meet its commitments as they fall due over the going concern period to 30 June
2026. Accordingly, the Directors have adopted the going concern basis in
preparing the financial statements.
Basis of consolidation
The consolidated financial information incorporates the Financial Statements
of the Group and all of its subsidiary undertakings. A subsidiary is defined
as an entity over which the Group has control. Control exists when the Company
has power over the investee, the Company is exposed, or has rights to variable
returns from its involvement with the subsidiary and the Company has the
ability to use its power over the investee to affect the amount of investor's
returns. The Financial Statements of all Group companies are adjusted, where
necessary, to ensure the use of consistent accounting policies. Acquisitions
are accounted for under the acquisition method from the date control passes to
the Group. On acquisition, the assets and liabilities of a subsidiary are
measured at their fair values. Any excess of the cost of acquisition over the
fair values of the identifiable net assets acquired is recorded as goodwill.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration
transferred, which is measured at acquisition date fair value, and the amount
of any non-controlling interests in the acquiree. Acquisition-related costs
are expensed as incurred and classified as non-underlying costs.
When the Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
Goodwill is initially measured at cost (being the excess of the aggregate of
the consideration transferred over the net identifiable assets acquired and
liabilities assumed). If the fair value of the net assets acquired is in
excess of the aggregate consideration transferred, the Group reassesses
whether it has correctly identified all of the assets acquired and all of the
liabilities assumed and reviews the procedures used to measure the amounts to
be recognised at the acquisition date. If the reassessment still results in an
excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. Goodwill is tested annually for impairment. For the purpose
of impairment testing, goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Group's cash-generating units
(CGUs) that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those
units.
Revenue recognition
Revenue from the sales of goods is recognised at the point in time when
control of the asset is transferred to the customer, in line with agreed
incoterms. Revenue is recognised at the fair value of the consideration
received or receivable for sale of goods to external customers in the ordinary
nature of the business. The fair value of the consideration takes into account
trade discounts, settlement discounts, volume rebates and the right of return.
Revenue in relation to royalty income is recognised over the period to which
the royalty term relates. Revenue in relation to design income is recognised
as the work is performed.
Rights of return
Under IFRS 15 a sale with right of return is recognised if the customer
receives any combination of the following:
- a full or partial refund of any consideration paid;
- a credit that can be applied against amounts owed, or that will
be owed, to the entity; and
- another product in exchange (except for in cases of a defective
product being returned, or the exchanged item is of the same type, quality,
condition and price).
The Group recognised a liability where it has historically accepted a right of
return. The Group estimates the impact of potential returns from customers
based on historical data on returns. A refund liability is recognised for the
goods that are expected to be returned. A right of return asset (and
corresponding adjustment to cost of sales) is also recognised for the right to
recover the goods from the customer, to the extent that these goods are not
considered impaired.
Inventories
Inventories are stated at the lower of cost and estimated selling price less
costs to sell after making due allowance for obsolete and slow-moving items.
Inventories are recognised as an expense in the period in which the related
revenue is generated.
Cost is determined on an average cost basis. Cost includes the purchase price
and other directly attributable costs to bring the inventory to its present
location and condition.
At the end of each period, inventories are assessed for impairment. If an item
of inventory is impaired, the identified inventory is reduced to its selling
price less costs to complete and sell and an impairment charge is recognised
in the income statement.
Royalties
Royalties payable reflect balances owed to brand owners for the right to use
the brand name. The royalty is payable based on a pre-agreed percentage of
sales volumes, with some arrangements also having minimum royalty payments for
specific periods. Royalties payable are recognised on delivery of the products
covered by such arrangements, with an additional accrual made where it is
considered that the sales level required to meet the minimum payment will not
be met.
Refinancing
Where a loan arrangement is replaced with a subsequent facility which is
materially different in relation to repayment structure or interest rate, or a
loan arrangement is repaid and a new loan entered, any capitalised loan
arrangement fees in respect of the previous loan are expensed, with
transaction costs relating to the new loan capitalised and held against the
value of the related liability.
Cash and cash equivalents
For the purpose of the Consolidated Statement of Cash Flows, cash and cash
equivalents comprise cash on hand and demand deposits, and short-term highly
liquid investments that are readily convertible into known amounts of cash,
that are subject to an insignificant risk of changes in value, and have a
short maturity of generally within three months when acquired, less bank
overdrafts which are repayable on demand and form an integral part of the
Group's cash management.
For the purpose of the Consolidated Statement of Financial Position, cash and
cash equivalents comprise cash on hand and at banks, including term deposits,
and assets similar in nature to cash, which are not restricted as to use.
Deferred and contingent consideration in relation to acquisitions
Deferred consideration to the previous owners arising on acquisitions are
treated as part of the consideration for the acquisition, with the liability
recognised on the statement of financial position at the date of the
acquisition. Where the consideration is contingent on continuing employment
within the Group, the charge is recognised through the income statement over
the period to which it relates.
Non-underlying costs
Non-underlying costs are those that in the Directors' view should be
separately disclosed due to their nature to enable a full understanding of the
Group's financial performance. These include income and expenditure that is
considered outside of the usual course of business and therefore is separately
identified to allow the users of the Financial Statements comparability versus
prior periods. The main categories of costs disclosed as non-underlying are
acquisition costs, restructuring costs and other professional service costs
relating to the accounting integration of acquisitions.
New and amended standards and interpretations
The following standards have been published and are mandatory for accounting
periods beginning after 1 January 2024:
- Amendments to IAS 1: Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current
- Amendments to IFRS 16: Leases
- Amendments to IAS 7: Statement of Cashflows
- Amendments to IFRS 7: Financial Instruments: Disclosures
None of the above standards have given rise to a significant change in the
reported results or financial position of the Group or Company.
The following standards have been published but are not mandatory for the
year-ended 31 December 2024 and have not been early adopted by the Group:
- IFRS 18: Presentation and Disclosure in Financial Statements
- IFRS 19: Subsidiaries without Public Accountability: Disclosures
- Amendments to IAS 21: The Effects of Changes in Foreign Exchange
Rates
The Group is currently reviewing the impact of the new standards not yet in
issue which are expected to change the structure and presentation of the
Group's Financial Statements.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Group's Financial Statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and their accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amounts of the assets or liabilities
affected in the future.
Estimates involve the determination of the quantum of accounting balances to
be recognised. Judgements typically involve decisions such as whether to
recognise an asset or liability.
The key assumptions concerning the future and other key sources of estimation
uncertainty at the end of the reporting period, that have a significant risk
of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis.
This requires an estimation of the value in use of the CGUs to which the
goodwill is allocated. Estimating the value in use requires the Group to make
an estimate of the expected future cash flows from the CGUs and also to choose
a suitable discount rate in order to calculate the present value of those cash
flows. The Group has considered the impact of climate risk on these cash flow
assessments, with mitigations such as price structuring. The carrying amount
of goodwill at 31 December 2024 was £55,741,000 (2023: £55,578,000). No
provision for impairment of goodwill was made as at the end of the reporting
period. See note 14 for further information.
Right of return
Management applies assumptions in determining the right of return liability
and the associated right of return asset. These assumptions are based on
analysis of historical data trends but require estimation of appropriate time
periods and expected return rates. During the period, a change in commercial
arrangement has been made in relation to the period over which returns are
accepted, with this under the control of the Group, and this applied to the
current period end position. This has been recognised through the current year
profit and loss in line with IAS 8.
The right of return liability at the period end is £10,608,000 (2023:
£11,297,000) with an associated right of return asset (held within inventory)
of £1,247,000 (2023: £1,415,000). If the change in commercial arrangement
was not applied as at 31 December 2024, a right of return liability of
£11,175,000 and an associated inventory asset of £1,347,000 would have been
recognised.
Judgements made by management which are considered to have a material impact
on the Financial Statements are as follows:
Uncertain tax positions
Tax authorities could challenge and investigate the Group's transfer pricing
or tax domicile arrangements. As a growing, international business, there is
an inherent risk that local tax authorities around the world could challenge
either historical transfer pricing arrangements between other entities within
the Group and subsidiaries or branches in those local jurisdictions, or the
tax domicile of subsidiaries or branches that operate in those local
jurisdictions. Judgement is therefore required in determining the completeness
of all uncertain tax positions identified. Further details are given in note
18.
Intangible Assets
On an annual basis, the Group assess its intangible assets for indicators of
impairment using both external and internal sources of information. If an
indicator of impairment is identified, the Group estimates the recoverable
amount of the asset. The judgements made by management in determining
whether there are any indicators of impairment can have a material impact on
the Financial Statements. During 2024, no indicators of impairment in relation
to material intangible assets were identified. The carrying amount of
intangible assets as at 31 December 2024 was £23,406,000 (2023:
£29,813,000).
Deferred tax
Deferred tax assets are recognised for unused tax losses to the extent that it
is probable that taxable profit will be available against which the losses can
be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely
timing and the level of future taxable profits, together with future tax
planning strategies.
4. NON-STATUTORY MEASURES
When reviewing performance, the Directors use alternative performance measures
in order to give meaningful year on year comparison. These alternative
performance measures are:
- EBITDA
- Underlying EBITDA
- Underlying Profit Before Tax (formally Adjusted Profit Before
Tax)
- Underlying Profit After Tax
- Underlying operating expenses
- Revenue on a constant exchange rate basis
Whilst we recognise that the measures used are alternative (non-Generally
Accepted Accounting Principles) performance measures which are not defined
within IFRS, these measures are important and should be considered alongside
the IFRS measures.
During the year the Group has introduced a new alternative performance
measure, being Underlying Profit After Tax. Underlying Profit After Tax
presents a performance measure of the company's profitability by excluding
one-time charges and non-operational items, with this measure building on
Underlying EBITDA to incorporate depreciation, interest and current tax
charges.
A reconciliation to these non-GAAP performance measures is shown below:
2024 2023
£'000 £'000
Operating profit 3,413 2,888
Add back: Amortisation 6,806 6,910
Add back: Depreciation 6,011 6,129
EBITDA 16,230 15,927
Add back: Share-based payment expense 371 972
Add back: Earnout on acquisition 981 1,140
Underlying EBITDA 17,582 18,039
Less: Depreciation (6,011) (6,129)
Less: Interest (excluding amortisation of loan arrangement fees) (3,802) (3,774)
Underlying Profit Before Tax 7,769 8,136
Less: Current Tax Expense (4,176) (2,932)
Underlying Profit After Tax 3,593 5,204
Less: Amortisation of loan arrangement fees (234) (141)
Less: Amortisation (6,806) (6,910)
Less: Share-based payment expense (371) (972)
Less: Earnout on acquisition (981) (1,140)
Less: Non-underlying costs (net) (468) (58)
Less: Share of loss of associate and joint venture (29) (12)
Add: Exchange adjustment on borrowings 97 1,312
Add: Deferred Tax Income 591 1,720
Loss for the period (4,608) (997)
Underlying Profit After Tax is used to calculate basic and diluted Underlying
earnings per share as per note 12. Underlying operating expenses is calculated
as the difference between gross profit and Underlying EBITDA.
In addition, the Directors consider the revenue of the Group on a constant
exchange rate basis. This is calculated using the average exchange rates in
effect for the corresponding comparative period for the translation of its
overseas operations.
5. REVENUE
The revenue of the Group is attributable to the one principal activity of the
Group.
a) Geographical analysis
The Group's revenue by destination is split in the following geographic areas:
2024 2023
£'000 £'000
United Kingdom 24,165 24,132
Europe (excluding UK) 87,601 94,572
North America 72,100 69,305
South America 1,711 1,825
Asia 3,771 4,678
Africa 358 515
Australia 8,552 8,265
198,258 203,292
For the year ended 31 December 2024 the Group had no customers which accounted
for more than 10% of the Group's revenue. For the year ended 31 December 2023
the Group had one customer which accounted for more than 10% of the Group's
revenues, with the revenue generated from this customer amounting to
£21,769,000. The revenue from this customer was generated across both the
Frames & Optics and Manufacturing reportable segments identified in note
6.
For the year ended 31 December 2024 the Group had revenues attributed to two
foreign countries which accounted for more than 10% of the Group's revenue.
These countries were the United States of America with revenues of
£67,316,000 (2023: £63,707,000) and Germany with revenues of £64,246,000
(2023: £68,579,000).
b) Right of return assets and liabilities
2024 2023
£'000 £'000
Right of return asset 1,247 1,415
Right of return liability (10,608) (11,297)
The right of return asset is presented as a component of inventory and the
right of return liability is presented separately on the face of the statement
of financial position. The right of return liability is presented as a current
liability as the timing of its utilisation is dependent on customer returns
which varies period to period and is outside of the Group's control.
6. SEGMENT INFORMATION
The Group operates in three operating segments, which upon application of the
aggregation criteria set out in IFRS 8 Operating Segments results in three
reporting segments:
- Frames and Optics product distribution
- Manufacturing - being OEM and manufacturing distribution
- Lenses - being manufacturing and distribution of lenses
The criteria applied to identify the operating segments are consistent with
the way the Group is managed. In particular, the disclosures are consistent
with the information regularly reviewed by the CEO and the CFO in their role
as Chief Operating Decision Makers, to make decisions about resources to be
allocated to the segments and to assess their performance.
The reportable segments subject to disclosure are consistent with the
organisational model adopted by the Group during the financial year ended 31
December 2024 and are as follows:
Total before
Manufacturing adjustments Adjustments
Frames (previously and and
and Optics Wholesale) Lenses eliminations eliminations Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
External 172,221 20,735 4,913 197,869 389 198,258
Internal 3,773 1,478 296 5,547 (5,547) -
175,994 22,213 5,209 203,416 (5,158) 198,258
Cost of sales (85,851) (11,097) (3,141) (100,089) 5,282 (94,807)
Gross profit 90,143 11,116 2,068 103,327 124 103,451
Expenses (74,577) (5,386) (3,991) (83,954) (3,267) (87,221)
Depreciation (4,661) (701) (546) (5,908) (103) (6,011)
Amortisation (5,938) (847) (21) (6,806) - (6,806)
Operating profit/(loss) 4,967 4,182 (2,490) 6,659 (3,246) 3,413
Exchange adjustment on borrowings 97
Non-underlying costs (net) (468)
Finance costs (4,237)
Finance income 201
Share of loss of associate and joint venture (29)
Taxation (3,585)
Loss for the year (4,608)
Total assets 332,447 64,343 9,722 406,512 (188,002) 218,510
Total liabilities (194,493) (5,569) (17,038) (217,100) 163,350 (53,750)
Deferred tax asset 1,738
Current tax liability (3,377)
Deferred tax liability (1,968)
Borrowings (62,467)
Group net assets 98,686
Other disclosures
Capital additions 1,645 939 336 2,920 - 2,920
The reportable segments subject to disclosure are consistent with the
organisational model adopted by the Group during the financial year ended 31
December 2023 and are as follows:
Total before
Manufacturing adjustments Adjustments
Frames (previously and and
and Optics Wholesale) Lenses eliminations eliminations Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
External 178,968 20,169 4,155 203,292 - 203,292
Internal 4,681 1,848 316 6,845 (6,845) -
183,649 22,017 4,471 210,137 (6,845) 203,292
Cost of sales (92,871) (11,712) (2,509) (107,092) 7,347 (99,745)
Gross profit 90,778 10,305 1,962 103,045 502 103,547
Expenses (74,606) (5,013) (3,407) (83,026) (4,594) (87,620)
Depreciation (4,826) (698) (556) (6,080) (49) (6,129)
Amortisation (6,248) (643) (19) (6,910) (6,910)
Operating profit/(loss) 5,098 3,951 (2,020) 7,029 (4,141) 2,888
Exchange adjustment on borrowings 1,312
Non-underlying costs (net) (58)
Finance costs (4,155)
Finance income 240
Share of loss of associate and joint venture (12)
Taxation (1,212)
Loss for the year (997)
Total assets 320,836 64,585 9,672 395,093 (176,013) 219,080
Total liabilities (182,225) (5,543) (14,408) (202,176) 151,741 (50,435)
Deferred tax asset 2,826
Current tax liability (2,186)
Deferred tax liability (3,647)
Borrowings (62,121)
Group net assets 103,517
Other disclosures
Capital additions 1,980 3,592 178 5,750 - 5,750
Total assets are the Group's gross assets excluding deferred tax asset. Total
liabilities are the Group's gross liabilities excluding loans and borrowings,
current and deferred tax liabilities.
Non-underlying costs (net), as well as net finance costs and taxation are not
allocated to individual segments as they relate to Group-wide activities as
opposed to individual reporting segments.
Deferred tax and borrowings are not allocated to individual segments as they
are managed on a Group basis.
Adjusted items relate to elimination of all intra-group items including any
profit adjustments on intra-group sales that are eliminated on consolidation,
along with the profit and loss items of the Parent Company.
Adjusted items in relation to segmental assets and liabilities relate to the
elimination of all intra-group balances and investments in subsidiaries, and
assets and liabilities of the Parent Company.
Underlying EBITDA by segment
2024 2023
£'000 £'000
Frames and Optics 16,628 17,620
Manufacturing 5,890 5,581
Lenses (1,923) (1,445)
Adjustments and eliminations (3,013) (3,717)
17,582 18,039
Non-current operating assets
2024 2023
£'000 £'000
United Kingdom 7,206 7,376
Europe 52,606 79,302
North America 24,919 6,938
Asia 27,064 27,375
111,795 120,991
Non-current assets for this purpose consist of property, plant and equipment,
right-of-use assets, goodwill and intangible assets.
During the year we have identified Tura and Eschenbach as separate CGUs (see
note 14), and as a result, the goodwill, along with the customer relationship
intangible assets arising on acquisition have been reallocated from Europe to
North America in the above table.
With respect to non-current assets located in material individual foreign
countries, the Group has determined that the necessary information is not
available and the cost to develop this is excessive.
7. EMPLOYEES AND DIRECTORS
2024 2023
£'000 £'000
Wages and salaries 50,325 48,482
Social security costs 7,623 8,809
Pension costs 682 532
Share-based payment expense 371 972
59,001 58,795
The average number of employees during the year by operating segment was as
follows:
2024 2023
Frames and Optics 681 669
Manufacturing 894 928
Lenses 79 76
1,654 1,673
Directors' remuneration during the year was as follows:
2024 2023
£'000 £'000
Directors' salaries 1,043 1,028
Directors' pension contributions 12 13
Share options - -
1,055 1,041
Information regarding the highest paid Director is as follows:
2024 2023
£'000 £'000
Salary 286 286
Pension contributions 4 5
Share options - -
Total remuneration 290 291
The number of Directors to whom employer pension contributions were made by
the Group during year is three (2023: three). This was in the form of a
defined contribution pension scheme.
8. NON-UNDERLYING COSTS (NET)
Non-underlying costs (net) are those that in the Directors' view should be
separately disclosed by virtue of their size, nature or incidence to enable a
full understanding of the Group's financial performance in the year and
business trends over time. Non-underlying costs (net) incurred during the year
are as follows:
2024 2023
£'000 £'000
Restructuring costs 335 58
Acquisition costs 24 -
Withholding tax provision charge 302 -
Gain on disposal of property, plant and equipment (193) -
468 58
Restructuring costs of £335,000 (2023: £58,000) were incurred in the period
in relation to strategic re-organisation and simplification, including the
integration of Inspecs USA with Tura and a sales team restructure for one of
our European subsidiaries. A provision of £302,000 (2023: £nil) has been
recognised through non-underlying costs in relation to pre-acquisition
withholding tax on one of the Group's subsidiaries.
Acquisition costs of £24,000 (2023: £nil) were incurred relating to the
acquisition of A-Optikk AS. Gain on disposal of property, plant and equipment
of £193,000 (2023: £nil) relates to the sale of the Magdala Road property
previously used as the manufacturing facility by Norville.
9. FINANCE COSTS AND FINANCE INCOME
2024 2023
£'000 £'000
Finance costs
Bank loan interest 3,102 3,377
Invoice discounting interest and charges 264 136
Loan transaction costs 234 138
Lease interest 589 504
Other finance costs 48 -
Total finance costs 4,237 4,155
Finance income
Interest receivable 201 240
10. (LOSS)/PROFIT BEFORE INCOME TAX
The (loss)/profit before income tax is stated after charging:
2024 2023
£'000 £'000
Cost of inventories recognised as expense 68,947 73,508
Short-term leases 377 434
Depreciation - owned assets 2,348 2,335
Depreciation - right-of-use assets 3,663 3,794
Amortisation - intangibles 6,806 6,910
11. INCOME TAX
Analysis of tax expense:
2024 2023
£'000 £'000
Current tax:
Current tax on profits for the year 407 88
Overseas current tax expense 3,710 2,979
Adjustment in respect of prior years 59 (135)
Total current tax 4,176 2,932
Deferred tax:
Deferred tax income relating to the origination and reversal of timing (578) (1,555)
differences
Effect of changes in tax rates - (62)
Adjustment in respect of prior years (13) (103)
Total deferred tax (591) (1,720)
Total tax charge reported in the consolidated income statement 3,585 1,212
Factors affecting the tax charge
The tax charge assessed for the year is higher than the standard rate of
corporation tax in the UK. The difference is explained below:
2024 2023
£'000 £'000
(Loss)/profit before income tax (1,023) 215
(Loss)/profit multiplied by standard rate of corporation tax in the UK of (256) 51
25.0% (2023: 23.5%)
Effects of:
Non-deductible expenses 154 202
Increase in provision for uncertain tax liabilities 552 12
Share-based payment 20 113
Different tax rate for overseas subsidiaries 3 (208)
Tax rate changes - (58)
Overseas tax charges 3 325
Amounts not recognised for deferred tax 2,675 603
Effects of group relief/other reliefs 392 -
Adjustments in respect of prior year 42 172
Tax charge 3,585 1,212
Movements in other comprehensive income relating to foreign exchange on
consolidation are not taxable.
As a result of the increase in the UK corporation tax rate from 19% to 25%
from 1 April 2023, the standard rate of corporation tax in the UK for the year
ended 31 December 2023 was 23.5%
Pillar Two legislation has been enacted in certain jurisdictions in which the
Group operates. However, this legislation does not apply to the Group as its
consolidated revenue is lower than €750 million.
12. LOSS PER SHARE ('LPS')
Basic LPS is calculated by dividing the profit or loss for the year
attributable to ordinary equity holders of the Parent by the weighted average
number of Ordinary Shares outstanding during the year.
Diluted LPS is calculated by dividing the profit or loss attributable to
ordinary equity holders of the Parent by the weighted average number of
Ordinary Shares outstanding during the year plus the weighted average number
of Ordinary Shares that would be issued on conversion of all the dilutive
potential Ordinary Shares into Ordinary Shares, to the extent that the
inclusion of such shares is not anti-dilutive. A loss has been made in the
year to 31 December 2024 and the comparative period. In accordance with IAS
33, potential Ordinary Shares shall be treated as dilutive when, and only
when, their conversion to Ordinary Shares would decrease earnings per share or
increase loss per share from continuing operations. As a loss is made,
including the dilution of potential Ordinary Shares reduces the loss per share
and therefore the outstanding options should not be treated as dilutive when
calculating LPS.
Basic underlying earnings per share figures are calculated by dividing
Underlying Profit After Tax for the year by the weighted average number of
Ordinary Shares outstanding during the year. Diluted underlying earnings per
share figures are calculated by dividing Underlying Profit After Tax for the
year by the weighted average number of Ordinary Shares plus the weighted
average number of Ordinary Shares that would be issued on the conversion of
all dilutive potential Ordinary Shares into Ordinary Shares. A reconciliation
to Underlying Profit After Tax can be found in note 4.
The following table reflects the income and share data used in the basic and
diluted LPS calculations:
Basic weighted
average number
of Ordinary Total (loss)/ (Loss)/earnings
Shares earnings per share
Year ended 31 December 2024 ('000) (£'000) (pence)
Basic Loss per Share 101,672 (4,608) (4.53)
Diluted Loss per Share 101,672 (4,608) (4.53)
Basic Underlying Earnings per Share 101,672 3,593 3.53
Diluted Underlying Earnings per Share 106,824 3,593 3.36
Basic weighted average number of Total (loss)/ (Loss)/earnings per
Ordinary Shares earnings share
Year ended 31 December 2023 ('000) (£'000) (pence)
Basic Loss per Share 101,672 (997) (0.98)
Diluted Loss per Share 101,672 (997) (0.98)
Basic Underlying Earnings per Share 101,672 5,204 5.12
Diluted Underlying Earnings per Share 107,246 5,204 4.85
13. ANALYSIS OF CASH FLOWS GIVEN IN THE STATEMENT OF CASH FLOWS
A reconciliation of profit for the year to cash generated from operations is
shown below:
2024 2023
Notes £'000 £'000
(Loss)/profit before income tax (1,023) 215
Adjustments for:
Depreciation 6,011 6,129
Amortisation 6,806 6,910
Share of loss of associate and joint venture 29 12
Share-based payment 371 972
Exchange adjustment on borrowings (97) (1,312)
Gain on disposal of property, plant and equipment 8 (193) -
Withholding tax provision 8,18 302 -
Finance costs 9 4,237 4,155
Finance income 9 (201) (240)
Changes in working capital
(Increase)/decrease in inventories (1,873) 7,310
Increase in trade and other receivables (3,931) (4,711)
Increase/(decrease) in trade and other payables 3,748 (2,526)
Cash flows from operating activities 14,186 16,914
14. GOODWILL
£'000
Cost
At 1 January 2024 55,578
Additions 163
At 31 December 2024 55,741
Net book value
At 31 December 2024 55,741
£'000
Cost
At 1 January 2023 and 31 December 2023 55,578
Net book value
At 31 December 2023 55,578
The following table reflects how the goodwill acquired through business
combinations has been allocated to cash-generating units ('CGU's'):
2024 2023
£'000 £'000
Eschenbach Group GmbH 26,405 42,884
Tura Inc 16,479 -
Twenty20 Limited 9,516 9,516
Ego Eyewear Limited 2,181 2,181
BoDe Design GmbH 807 807
INSPECS Limited 173 173
A-Optikk AS 163 -
INSPECS USA 17 17
55,741 55,578
During the year goodwill has been reallocated from the Eschenbach Group GmbH
cash-generating unit to a new Tura Inc cash-generating unit. This was required
following a change in the reporting and management structure of the Group, and
in turn, the lowest level at which the largely independent cash inflows are
generated. The allocation was performed using the relative value method, based
on the recoverable amount of each CGU on 1 January 2024.
Impairment testing of goodwill
The recoverable amount of each CGU has been determined based on individual
value in use calculations using cash flow projections covering a five-year
period approved by senior management. The forecasts for 2025 have been
prepared based on Board approved budgets for 2025. Financial years 2026 to
2029 were forecasted based on specific growth rates for each CGU. From 2030
onwards we have assumed a 2.0% (2023: 2.0%) terminal growth rate.
As part of our goodwill impairment assessments, we consider the financial
impact of climate-related risks and opportunities and our committed transition
targets on the Group's cash flow projections. In the short to medium term
(defined as until 2030) we do not expect climate-related risks or
opportunities to have a significant impact on the Group's financial
projections. Costs to meet our climate-related targets are built into local
entity budgets with efficiency savings largely expected to off-set any costs.
The long-term impacts of climate change are a lot more uncertain; INSPECS'
financial modelling of these risks and opportunities remains ongoing. We have
used market CAGR rates for our long-term growth projections which include the
market's assessments of all future risks. We deem this to be appropriate as
from our assessment INSPECS is not more susceptible to climate risks than the
market average.
The discount rates used are before tax and reflect specific risks where
required relating to the cash-generating unit. For material goodwill balances,
discount rates used for each value in use calculation along with relevant
sensitivity analyses are detailed as follows:
Eschenbach Holdings GmbH
The discount rate applied to the cash flow projections was 13.3% (2023:
12.4%). For the period 2026 to 2029, the following assumptions have been used:
2.1% (2023: 5.0%) per annum revenue growth, flat gross profit margin and 2.0%
(2023: 2.0%) per annum increase in administrative expenses. Based on
management's assessment there is no impairment adjustment required on
goodwill.
To recognise an impairment on the discount rate alone, the discount rate would
need to exceed 13.8% (2023: 19.8%). To recognise an impairment on the revenue
growth rate 2026-2029 alone, the revenue growth rate would need to drop below
1.9% (2023: 2.0%) per year. To recognise an impairment on the administrative
expenses growth rate 2026-2029 alone, the administrative costs growth would
need to exceed 2.2% per year (2023: 5.8%). To recognise an impairment on the
terminal growth rate alone, the terminal growth rate would need to drop below
1.3% (2023: (14.1)%).
Tura Inc
The discount rate applied to the cash flow projections was 14.4%. For the
period 2026 to 2029, the following assumptions have been used: 3.9% per annum
revenue growth, being above the market rate, based on Group synergies expected
to be delivered, flat gross profit margin and 2.5% per annum increase in
administrative expenses. Based on management's assessment there is no
impairment adjustment required on goodwill.
To recognise an impairment on the discount rate alone, the discount rate would
need to exceed 19.2%. To recognise an impairment on the revenue growth rate
2026-2029 alone, the revenue growth rate would need to drop below 0.8% per
year.
Twenty20 Limited
The discount rate applied to the cash flow projections was 11.9% (2023:
11.7%). For the period 2026 to 2029, the following assumptions have been used:
4.2% (2023: 3.0%) per annum revenue growth, with the above market growth
expectation as a result of additional expected revenue generated by the new
factory, flat gross profit margin and 2.5% (2023: 3%) per annum increase in
administrative expenses. Based on management's assessment there is no
impairment adjustment required on goodwill.
To recognise an impairment on the discount rate alone, the discount rate would
need to exceed 16.2% (2023: 17.8%). If the terminal growth rate was decreased
to 1.0%, the discount rate applied to the cash flow projections would need to
exceed 15.6% (2023: 17.2%) before an impairment would be recognised. To
recognise an impairment on the revenue movement 2026-2029 alone, revenue would
need to drop by more than 4.2% (2023: 12.7%) per year.
EGO Eyewear Limited
The discount rate applied to the cash flow projections was 13.1% (2023:
10.6%). For the period 2026 to 2029, the following assumptions have been used:
2.5% (2023: 5%) per annum revenue growth and a 2.0% (2023: 5%) per annum
increase in administrative expenses. Based on management's assessment there is
no impairment adjustment required on goodwill.
To recognise an impairment on the discount rate alone, the discount rate would
need to exceed 20.3% (2023: 15.4%). To recognise an impairment on the
administrative expenses growth rate 2026-2029 alone, the rate of increase in
costs would need to exceed 9.2% (2023: 8.7%) per year. To recognise an
impairment on the revenue movement 2026-2029 alone, revenue would need to drop
by more than 2.2% (2023: 1.8%) per year.
BoDe Design GmbH
The discount rate applied to the cash flow projections was 13.9% (2023:
14.1%). For the period 2026 to 2029, the following assumptions have been used:
1.7% (2023: 5%) per annum revenue growth, flat gross profit margin and 2.0%
(2023: 3%) per annum increase in administrative expenses. The terminal growth
rate of 2.0% (2023: 2.0%), applied from 2030 onwards, is higher than the
revenue growth rate for 2026 to 2029. This assumption is based on the expected
recovery of the German economy from 2030. Based on management's assessment
there is no impairment adjustment required on goodwill.
To recognise an impairment on the discount rate alone, the discount rate would
need to exceed 23.8% (2023: 33.7%). To recognise an impairment on the revenue
movement 2026-2029 alone, revenue would need to drop by more than 0.3% (2023:
1.5%) per year.
15. RESERVES
Share premium
This reserve records the amount above the nominal value of the sums received
for shares issued, less transaction costs.
2024 2023
£'000 £'000
At 1 January and 31 December 89,508 89,508
Foreign currency translation reserve
This reserve records the foreign currency translation adjustments on
consolidation.
2024 2023
£'000 £'000
At 1 January 5,435 9,434
Other comprehensive income (594) (3,999)
At 31 December 4,841 5,435
Share option reserve
The share option reserve is used to recognise the value of equity-settled
share-based payments provided to employees, including key management
personnel, as part of their remuneration.
2024 2023
£'000 £'000
At 1 January 3,222 2,703
Share-based payment charge 371 972
Share options forfeited (23) (453)
At 31 December 3,570 3,222
The share-based payment charge for the year is recognised against the reserve
as per IFRS 2 Share-Based Payments. 30,000 share options have been forfeited
during the period as a result of employees leaving before the option vesting
date. Upon forfeiture of share options, the related share option reserve is
recycled into accumulated losses, resulting in the movement of £23,000 from
the share option reserve to accumulated losses.
Merger reserve
This reserve arose on the share for share exchange between INSPECS Holdings
Limited and INSPECS Group plc on 10 January 2020.
2024 2023
£'000 £'000
At 1 January and 31 December 5,340 5,340
Accumulated losses
2024 2023
£'000 £'000
At 1 January (1,005) (461)
Loss for the year (4,608) (997)
Share options forfeited 23 453
At 31 December (5,590) (1,005)
16. FINANCIAL LIABILITIES - BORROWINGS
2024 2023
£'000 £'000
Current:
Invoice discounting 1,777 887
Bank loans 9,796 9,650
Lease liabilities 6,389 3,350
16,185 13,000
2024 2023
£'000 £'000
Non-current:
Bank loans 35,263 33,733
Lease liabilities 9,242 14,501
44,505 48,234
On 13 December 2024, the Group repaid its previous multi-currency term loan
and revolving credit facility with HSBC, amounting to £33,568,000. At the
same time, the Group entered a new term loan with HSBC for €12,000,000
(£9,964,000 equivalent) and a new multi-currency revolving credit facility
loan amounting to €36,000,000 (£28,232,000 equivalent).
Repayments under the Term loan are €750,000 (£620,000 equivalent) per
quarter plus interest, with the liability standing at €12,000,000
(£9,944,000 equivalent) at 31 December 2024. Interest is payable at the
applicable Margin Rate plus EURIBOR calculated daily on a 360-day year basis.
The Margin Rate is 2.00%, 2.25%, 2.50% or 3.00% dependent upon the Group's
leverage ratio. The loan matures in December 2027 with two one-year extension
options subject to bank consent.
As at 31 December 2024, €34,000,000 (£28,174,000 equivalent) of the
Revolving Credit Facility was drawn. Interest is payable at EURIBOR plus the
Margin Rate calculated daily on a 360-day year basis. The Margin Rate is
2.10%, 2.35%, 2.60% or 3.10% dependent upon the Group's leverage ratio. The
credit facility matures in December 2027, with two one-year extension options
subject to bank consent.
A further line of credit is held amounting to $10,000,000 (£7,977,000
equivalent). As at 31 December 2024, $9,472,000 (£7,556,000 equivalent) was
drawn, this is a twelve-month rolling facility, due for renewal in December
2025. This line of credit holds an interest rate of SOFR plus 2.25%. This is
repayable on demand and is disclosed as a current liability.
At the balance sheet date, the invoice discounting facility was fully drawn at
£1,777,000 (2023: £887,000). The invoice discounting facility bears interest
at 2.25% over base rate (2023: 2.25%). The invoice discounting facility is
secured by way of fixed and floating charges over the trade receivables of
INSPECS Limited. The facility has no fixed end date, with a notice period of
three months.
The Group's non-current bank loans have the right to defer settlement beyond
twelve months, contingent upon compliance with the covenants.
The Group's bank loans are secured against the business assets of the Group.
The Group's lease liabilities are secured against the assets concerned.
17. DEFERRED AND CONTINGENT CONSIDERATION
Deferred and contingent considerations payable relate to the acquisitions of
BoDe Design GmbH and EGO Eyewear Limited. The split of the deferred and
contingent consideration between each entity is as follows:
2024 2023
£'000 £'000
EGO Eyewear Limited - 652
Total non-current deferred consideration - 652
2024 2023
£'000 £'000
EGO Eyewear Limited 700 700
Total current deferred consideration 700 700
BoDe Design GmbH 343 467
EGO Eyewear Limited 830 944
Total current contingent consideration 1,173 1,411
Total current deferred and contingent consideration 1,873 2,111
The previous owners of BoDe Design and EGO Eyewear are entitled to earnout
payments based on the performance of each entity to 31 December 2025. A charge
has been recognised in the income statement of £981,000 (2023: £1,140,000)
in relation to the earnout payable as a result of performance for the year to
31 December 2024.
18. TAX RECEIVABLE AND PAYABLE
2024 2023
£'000 £'000
Corporation tax receivable 107 386
Total tax receivable 107 386
2024 2023
£'000 £'000
Corporation tax payable 1,944 1,590
Uncertain tax liabilities 1,131 596
Withholding tax provision 302 -
Total tax payable 3,377 2,186
As is routine, our subsidiaries are subject to tax audits and inquiries from
tax authorities. As a result of ongoing inquiries made by authorities the
Group has made estimates of the potential liability for withholding tax and
positions taken on transfer pricing.
The liability associated with the withholding tax provision has been
recognised through non-underlying costs as it relates to pre-acquisition
withholding tax (see note 8). A provision has been recognised in relation to
possible liability relating to transfer pricing of £535,000.
The Group has previously identified it is potentially exposed to uncertain tax
positions in relation to tax authorities challenging that the Group has
created a taxable presence and asset taxing rights over profits they consider
to be allocable in the given territory. The Group considers that it is
possible that these uncertain tax positions may result in a future outflow of
funds to one or more local tax authorities and has recognised current tax
liabilities for these uncertainties.
Due to the range of potential outcomes that the Directors have identified,
these liabilities have been measured using an expected value methodology. Key
assumptions underpinning the expected value calculations are (i) relative
probabilities of such tax liabilities crystallising in one or more of the
jurisdictions in which the Group operates, (ii) the tax periods over which tax
authorities would seek to challenge the Group's tax domicile arrangements; and
(iii) the quantum of interest and penalties that would be applicable in the
event that the Group was found to be liable for tax amounts by one or more tax
authorities.
19. POST BALANCE SHEET EVENTS
Since the balance sheet date, a breach in the Group's cashflow cover covenant
requirement was identified in relation to the testing period as of 31 March
2025. This was caused by accelerated payments to suppliers. On 9 April 2025
HSBC Bank provided a formal waiver in relation to this covenant requirement.
The Group expects to meet all further covenant requirements for the going
concern period as explained within the going concern section of the accounting
policies note.
Since the balance sheet date, but before these Financial Statements were
approved, there were no further events that the Directors consider material to
the users of these Financial Statements.
The financial information set out above is unaudited and does not constitute
the Company's statutory accounts for the year ended 31 December 2024.
Statutory accounts for 2024 will be delivered in due course.
Cautionary Statement
This announcement contains forward looking statements which are made in good
faith based on the information available at the time of its approval. It is
believed that the expectations reflected in these statements are reasonable,
but they may be affected by a number of risks and uncertainties that are
inherent in any forward-looking statement which could cause actual results to
differ materially from those currently anticipated. Nothing in this document
should be regarded as a profits forecast.
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