REG - Kitwave Group PLC - Interim Results
02/07/2024 07:15
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RNS Number : 6977U Kitwave Group PLC 02 July 2024
2 July 2024
Kitwave Group plc
("Kitwave", the "Group" or the "Company")
Unaudited interim results for the six months ended 30 April 2024
Kitwave Group plc (AIM: KITW), the delivered wholesale business, is pleased to
announce its unaudited interim results for the six months ended 30 April 2024
("the period" or "H1 2024").
The tables and commentary below include comparatives for both the six months
ended 30 April 2023 (H1 2023) and the 12 months ended 31 October 2023 (FY
2023).
Highlights
· Revenues up 8% to £297.0 million (H1 2023: £275.0 million; FY 2023:
£602.2 million).
· Consolidated gross margin stable at 21.5% (H1 2023: 21.6%; FY 2023:
21.9%).
· Adjusted EBITDA of £15.9 million (H1 2023: £16.0 million; FY 2023:
£41.1m).
· Adjusted operating profit of £10.8m (H1 2023: £11.7 million; FY
2023: £32.0m).
· Cash generation from operating activities of £12.4 million (H1 2023:
£11.7 million; FY 2023: £30.3 million) leading to pre-tax operational cash
conversion of 93% (H1 2023: 87%; FY 2023: 90%).
· Investment in the business has continued ahead of future potential
growth opportunities, with operational and financial benefits being realised
from H2 2024 onwards.
· Two successful acquisitions in the period have both been integrated
into the Group's Foodservice division:
o WLG (Holdings) Limited ("Wilds"), a composite family-run drinks business
based in Oldham; and
o Total Foodservice Solutions Limited ("Total Foodservice"), a leading
independent food wholesaler in the North of England.
· Paul Young retired as CEO at the Group's AGM, with Ben Maxted,
previously COO, stepping into the position of CEO.
· The Board has declared an increased interim dividend of 3.85 pence
per share (H1 2023: 3.75 pence per share) for the six months to 30 April 2024.
This dividend will be paid on 2 August 2024 to shareholders on the register at
the close of business on 12 July 2024 and the ex-dividend date will be 11 July
2024.
Financial summary
H1 2024 H1 2023 FY 2023
Unaudited
Unaudited
Audited
£m £m
£m
Revenue 297.0 275.0 602.2
Gross profit 63.7 59.3 132.1
Gross profit margin % 21.5% 21.6% 21.9%
Operating profit 9.3 10.2 29.4
Operating margin % 3.1% 3.7% 4.9%
Profit before tax 6.9 8.3 24.9
Net cash inflow from operating activities
12.4 11.7 30.3
Pre-tax operational cash conversion * 93% 87% 90%
*For more information on alternative performance measures please see the
glossary at the end of the announcement.
Ben Maxted, Chief Executive Officer of Kitwave, commented:
"The Group has made positive progress towards its strategic targets during H1
2024 with a series of important investments that will benefit the Group in the
long term.
"The continuation of our acquisition strategy saw Wilds and Total Foodservice
brought into the Group, growing our presence in the Foodservice sector in the
North. Their integration into the Group has gone well and workstreams to
further integrate the enlarged Northern Foodservice operation have commenced.
"The construction of our new Foodservice distribution site in the Southwest is
close to completion, which will both add capacity and further efficiencies as
we consolidate three existing depots. Ahead of the completion of the new site,
WestCountry has successfully migrated onto the Group's ERP system to enable a
smooth integration of the businesses.
"As noted in the pre-close trading update, operating profit for H1 2024 is
slightly behind the prior year due to investment and lower levels of demand in
the Group's Foodservice hospitality customer base. This, alongside the
benefits of the increased investment in infrastructure and the inclusion of
trade from Total Foodservice in H2 2024 will lead to the Company's annual
financial performance having an increased second-half weighting.
"Despite the slight shortfall in operating profit in H1 2024 and the continued
wet weather in May and early June, we expect to be in line with market
expectations for the full year ending 31 October 2024."
- Ends -
For further information please contact:
Kitwave Group plc Tel: +44 (0) 191 259 2277
Ben Maxted, Chief Executive Officer
David Brind, Chief Financial Officer
www.kitwave.co.uk (http://www.kitwave.co.uk/)
Canaccord Genuity Limited Tel: +44 (0) 20 7523 8150
(Nominated Adviser and Sole Broker)
Bobbie Hilliam
Yellow Jersey PR Tel: +44 (0) 20 3004 9512
(Financial media and PR)
Charles Goodwin
Shivantha Thambirajah
Bessie Elliot
Company Overview
Founded in 1987, following the acquisition of a single-site confectionery
wholesale business based in North Shields, United Kingdom, Kitwave is a
delivered wholesale business, specialising in selling and delivering impulse
products, frozen, chilled and fresh foods, alcohol, groceries and tobacco to
approximately 42,000, mainly independent, customers.
With a network of 32 depots, Kitwave is able to support delivery throughout
the UK to a diverse customer base, which includes independent convenience
retailers, leisure outlets, vending machine operators, foodservice providers
and other wholesalers, as well as leading national retailers.
The Group's growth to date has been achieved both organically and through a
strategy of acquiring smaller, predominantly family-owned, complementary
businesses in the fragmented UK grocery and foodservice wholesale market.
Kitwave Group plc (AIM: KITW) was admitted to trading on AIM of the London
Stock Exchange on 24 May 2021.
For further information, please visit: www.kitwave.co.uk
(http://www.kitwave.co.uk) .
Chief Executive Officer's statement
Introduction
The Group has made positive operational and commercial progress during the
period. We continued to execute our growth strategy with the acquisitions of
Wilds, a composite family-run drinks wholesaler, and Total Foodservice, a
leading food wholesaler. These two independent businesses complement our
expanding Foodservice division, and with both situated in the North of England
provide geographical synergies to existing Group trading entities. Their
integration into the Group has gone well and they are performing in line with
management's expectations.
As noted in our pre-close trading update, the Group is trading in line with
current full-year expectations despite H1 operating profit being slightly down
on the prior year. The hospitality customers of our Foodservice division
experienced lower footfall due to the sustained period of wet weather in the
first four months of calendar year 2024, whilst we also made further
investments in our infrastructure to drive greater efficiencies. Combining the
benefits that we expect to flow from these investments and the additional
contribution from the recent acquisitions, we expect results to be further
weighted to H2 2024.
Financial summary
In the six months to 30 April 2024, the Group achieved revenue of £297.0
million (H1 2023: £275.0 million; FY2023: £602.2 million) and an operating
profit of £9.3 million (H1 2023: £10.2 million; FY2023: £29.4 million).
H1 2024 H1 2023 FY 2023
Unaudited
Unaudited
Audited
£m £m
£m
Revenue 297.0 275.0 602.2
Gross profit 63.7 59.3 132.1
Gross profit margin % 21.5% 21.6% 21.9%
Operating profit 9.3 10.2 29.4
Operating margin % 3.1% 3.7% 4.9%
Cash generation remained strong in the period with £12.4 million generated
from operating activities (H1 2023: £11.7 million; FY 2023: £30.3 million).
The net cash outflows relating to the acquisition of Wilds and Total
Foodservice were £2.5 million and £16.9 million respectively, after
accounting for cash and overdrafts acquired. There are no further cash
outflows concerning the transactions. The acquisitions were funded entirely in
cash through existing banking facilities.
The Group's cash and cash equivalents increased by £4.3 million during the
period, after cash outflows to satisfy debt service payments and dividends
paid. This increase was driven by cash generated from operations of £12.4
million, in addition to the ability to draw on the Group's banking facilities
to fund the cash cost of the acquisitions.
The Group's balance sheet as of 30 April 2024 had equity reserves of £85.0
million (30 April 2023: £74.0 million; 31 October 2023: £84.4 million) and
net debt of £83.9 million (30 April 2023: £64.4 million; 31 October 2023:
£59.4 million).
Subject to finalising valuations, the acquisition of Wilds increased goodwill
by £2.0 million, while the acquisition of Total Foodservice increased
goodwill by £9.5 million, resulting in goodwill at the period end of £70.2
million (30 April 2023: £58.7 million; 31 October 2023: £58.7 million) and
an increase in intangible assets in the form of brand and customer
relationships of £3.6 million. The amortisation associated with these
intangible assets in the period was negligible.
The increase in debt of £24.5 million since the year-end 31 October 2023
principally relates to the net cash outflow from the acquisitions of £19.4
million. Leverage has increased to 2.0x (30 April 2023: 1.9x; 31 October 2023:
1.4x) and interest costs have increased accordingly. It is expected that the
strong continued cash generation of the Group will drive the principal debt
down during the remainder of the current financial year. The Board is
committed to maintaining a prudent leverage policy moving forward.
Basic earnings per ordinary share was 7.3 pence (30 April 2023: 9.1 pence).
This reduction is a result of the decrease in operating profit, the increase
in interest costs associated with the funding required for the acquisitions in
the period and an increase in the corporation tax rate compared to the H1
2023.
Divisional summary
Set out below is the financial performance of the business by division:
H1 2024 H1 2023 FY 2023
Unaudited
Unaudited
Audited
£m £m
£m
Group revenue 297.0 275.0 602.2
Ambient 99.1 98.1 207.2
Frozen & Chilled 104.9 96.1 216.4
Retail & wholesale 204.0 194.2 423.6
Foodservice 93.0 80.8 178.6
Corporate - - -
Group adjusted operating profit** 10.8 11.7 32.0
Ambient 4.7 4.7 10.5
Frozen & Chilled 2.6 2.2 9.9
Retail & wholesale 7.3 6.9 20.4
Foodservice 6.2 7.3 17.0
Corporate (2.7) (2.5) (5.4)
** Group operating profit/(loss) adjusted for acquisition, amortisation of
intangible assets arising on acquisition, share-based payments and
compensation for post-combination services. For more information on
alternative performance measures please see the glossary at the end of the
announcement.
The Group has demonstrated growth in revenue during the period, with an 8.0%
increase in revenue to £297.0 million (H1 2023: £275.0 million). Operating
profit decreased by 9.0% to £9.3 million (H1 2023: £10.2 million) and the
Group's adjusted operating profit decreased by 7.7% to £10.8 million (H1
2023: £11.7 million)
The Group's gross profit margin declined slightly to 21.5% (H1 2023: 21.6%),
reflective of the reduced turnover across our hospitality customers within the
Foodservice division, which was driven by a reduction in footfall due to the
persistent wet weather in the first four months of calendar year 2024. As
these customers are service led, they operate on a higher margin structure,
therefore the weaker revenues experienced resulted in a margin decrease for
the Group. The Group expects an improvement in gross margin during H2 2024.
Excluding the acquisitions of Wilds and Total Foodservice, revenue grew by
5.9% and adjusted operating profit fell by 13.1% compared to H1 2023.
The Group's cost base has been affected by inflationary pressures, with most
increases being reflected in labour and delivery-based costs. We are
continually striving to mitigate such cost increases and as a result, the
ratio of distribution costs to revenue is slightly improved on the prior
period. It is expected that these cost pressure increases will ease over time,
as we anticipate lower levels of fuel pricing and lower wage inflation
compared to the last 18 months.
Retail & wholesale division
The Group's Ambient and Frozen & Chilled product businesses both service
the Retail & Wholesale sector of the grocery market. To be consistent with
the market view, these divisions are considered together and saw combined
revenue increase by 5.0% to £204.0 million (H1 2023: £194.2 million).
The retail & wholesale businesses performed in line with expectations
during the period. The division benefitted from the successful onboarding of
new national contracts. Continued focus on gross margin and operational
efficiencies mitigated inflationary pressure across labour and delivery costs.
Operating profit percentage is in line with H1 2023 and the continued focus on
gross margins and operational efficiencies into H2 2024 will allow the
division to take advantage of the seasonal uplift.
Foodservice division
On 17 November 2023, the Group acquired the entire issued share capital of
Wilds and on 27 March 2024, the Group acquired the entire issued share capital
of Total Foodservice. Both businesses have been incorporated into the
Foodservice division.
The acquisitions have enabled the Group to expand its product range in the
drinks and food wholesaler industry in the North of England, providing both
geographical and operational synergies with the Group's existing trading
entities. These acquisitions form a part of the Group's growing Foodservice
division that saw revenue increase by 15.1% to £93.0 million (H1 2023: £80.8
million). Excluding the acquisition of Wilds and Total Foodservice, revenue
increased by £6.4 million, representing 7.9% growth compared to H1 2023.
Overall, the division traded behind the prior period's operating profit due to
decreased turnover across higher-margin hospitality customers, driven by the
reduced footfall. Despite this, customer numbers remain strong, and the
division is well-placed to benefit from the seasonal uplift in H2 2024. While
the division, like the rest of the Group, suffered operating cost-based
inflation, management has also invested in its growth by increasing our
customer service offering and developing the new Southwest foodservice site.
Operational review
The Group continues to grow its web-based trading platform with the rollout
across all businesses and utilisation of the platform increasing month on
month. Electronic and online order capture stood at 47% at the end of October
2023 and was at 49% at the end of the period, with average order values
compared to more traditional methods of order taking the remaining 8% ahead
due to the additional e-commerce functionalities that the web platform offers.
The brand owner engagement is fully immersed for the period, having a positive
effect on a large proportion of our brand partners by developing mutually
beneficial e-commerce partnerships that continue to result in an improved
customer experience and sales offering.
Following a £150,000 investment, the Group's Northern ambient hub now has
voice-picking technology installed on site. The technology uses voice commands
with higher pick accuracy, which will lead to operational efficiencies in pick
rates, with the three-month project completed on time and within budget. The
Group will look to implement a further rollout of the technology across other
divisions in due course, with Robotic Automated Processing being actively
developed and deployed across back and middle office functions which will
allow the Group to benefit from increased data processing efficiency.
The construction of the Group's new 80,000 sq. ft distribution site in the
Southwest is nearing completion and is expected to be operational in Q3 2024.
The new depot will enable the Group to consolidate three sites into one and
will further integrate WestCountry and M.J. Baker. The site will offer a full
Kitwave-wide product offering with a complete food service range, ice cream,
fresh produce, and on-trade to the customer base. This is an important step
for the Group as the infrastructure will drive organic growth opportunities
within the Foodservice division whilst creating a more streamlined structure
to drive higher operational margins.
The Group maintains its ongoing partnership with Businesswise Solutions, an
energy management consultancy specialising in energy-intensive businesses and
is engaging with sector specialists to further develop the Group's net-zero
plan and TCFD-aligned reporting requirements.
The implementation of the 'Kitwave One' employee portal continues to be rolled
out across the whole Group to further provide benefits for all employees. The
'Licence to Lead' leadership programme will be rolled out throughout FY24 to
continue to develop our people, giving them the foundation to become senior
leaders in the future.
At the Company's AGM in March 2024, Paul Young retired as CEO and as a
Director of the Company. Ben Maxted, who previously held the position of COO,
became Kitwave's new CEO.
Strategy
Kitwave is currently the 15th largest grocery and foodservice wholesaler in
the UK in terms of market share but only services circa five percent of the
potential market opportunity of circa £10.7bn. It is well documented that the
UK wholesale market is highly fragmented, which presents opportunities for the
Group to pursue strategic acquisitions to strengthen its existing business
lines and capitalise on synergies. Since 2011, the Group has completed 14
acquisitions.
During the period, the Group has continued to execute its buy-and-build
strategy with the acquisitions of Wilds and Total Foodservice. Both are
well-established businesses in the catering industry that complement Kitwave's
current offering. Total Foodservice, which is a one-stop shop for wholesale
commercial catering supplies, enables Kitwave to further expand its product
range offering across the North of England, while Wilds is an established
drinks wholesaler which will bolster the Group's existing Foodservice on-trade
business.
The Group continues to invest in technology, systems and infrastructure to
support its organic growth objectives. Investment has been made in
voice-picking technology to deliver greater efficiencies and obtain the
highest level of customer service. The trading platform continues to be
expanded, enhancing order capability and customer engagement and the
construction of the new distribution centre in the Southwest will be completed
in Q3 2024, enabling Kitwave to fully capitalise on organic growth
opportunities in the region.
Dividend
The final dividend of 7.45 pence per share for the financial year ended 31
October 2023 was paid on 26 April 2024. The Board is pleased to declare an
increased interim dividend of 3.85 pence per share (H1 2023: 3.75 pence per
share) for the six months to 30 April 2024. It will be paid on 2 August 2024
to shareholders on the register at the close of business on 12 July 2024 and
the ex-dividend date will be 11 July 2024.
Outlook
We have built an excellent platform for growth within the UK wholesale market.
With our focused growth strategy, both organic and through acquisitions, we
believe that we continue to be well-placed to deliver value for the Group and
its shareholders.
The development of our distribution centre in the Southwest will help grow our
delivery capability and widen our footprint in the region. With the planned
completion in Q3 2024, we believe this will bring further opportunities to
increase revenue and provide operating efficiencies in the Foodservice
division once fully operational.
As previously noted, following additional investments, trading will be further
weighted towards the second half of the financial year. Whilst we remain
conscious of the ongoing macroeconomic challenges, based on current trading,
we expect to be in line with market expectations for the full year.
Ben Maxted
Chief Executive Officer
2 July 2024
Condensed consolidated statement of profit and loss and other comprehensive
income
Note 6 months ended Year ended
31 October 2023 Audited
6 months ended 30 April 2023 Unaudited
30 April 2024 Unaudited
£000 £000 £000
Revenue 3 296,960 274,950 602,220
Cost of sales (233,223) (215,621) (470,095)
Gross profit 63,737 59,329 132,125
Other operating income 4 98 157 183
Distribution expenses (27,949) (26,262) (54,570)
Administrative expenses (26,590) (23,008) (48,375)
Operating profit 9,296 10,216 29,363
Analysed as:
Adjusted EBITDA 15,863 16,017 41,141
Amortisation of intangible assets 5 (557) (449) (975)
Depreciation 5 (4,967) (4,210) (8,992)
Acquisition expenses 5 (416) (648) (648)
Compensation for post combination services 5 (79) (48) (199)
Share based payment expense 5 (548) (446) (964)
Total operating profit 9,296 10,216 29,363
Finance expenses (2,417) (1,956) (4,505)
Profit before tax 6,879 8,260 24,858
Tax on profit on ordinary activities (1,796) (1,901) (5,902)
Profit for the financial period 5,083 6,359 18,956
Other comprehensive income - - -
Total comprehensive income for the period 5,083 6,359 18,956
Basic earnings per share (pence) 6 7.3 9.1 27.1
Diluted earnings per share (pence) 6 6.9 8.7 26.0
Condensed consolidated balance sheet
30 April 2024 Unaudited 30 April 2023 Unaudited 31 October 2023
Audited
£000 £000 £000
Non-current assets
Goodwill 70,090 58,680 58,680
Intangible assets 8,112 5,384 4,878
Tangible assets 22,767 16,404 16,614
Right-of-use assets 32,611 26,575 29,716
Investments 61 45 45
133,641 107,088 109,933
Current assets
Inventories 53,836 45,769 35,410
Trade and other receivables 75,677 65,388 63,569
Cash and cash equivalents 5,015 3,288 673
134,528 114,445 99,652
Total assets 268,169 221,533 209,585
Current liabilities
Other interest bearing loans and borrowings (33,125) (16,816) (6,405)
Lease liabilities (7,020) (5,899) (6,402)
Trade and other payables (90,729) (77,767) (63,596)
Tax payable (1,217) (973) (594)
(132,091) (101,455) (76,997)
Non-current liabilities
Other interest bearing loans and borrowings (20,000) (20,000) (20,000)
Lease liabilities (28,116) (24,092) (26,267)
Deferred tax liabilities (2,956) (2,019) (1,876)
(51,072) (46,111) (48,143)
Total liabilities (183,163) (147,566) (125,140)
Net assets 85,006 73,967 84,445
Equity attributable to equity holders of the
Parent Company
Called up share capital 701 700 700
Share premium account 64,349 64,183 64,183
Consolidation reserve (33,098) (33,098) (33,098)
Share based payment reserve 2,576 1,536 2,042
Retained earnings 50,478 40,646 50,618
Equity 85,006 73,967 84,445
Condensed consolidated statement of change in equity
Called up Share Share based payment reserve Profit
share premium Consolidation and loss Total
capital account reserve account equity
£000 £000 £000 £000 £000 £000
Balance at 1 November 2022 (audited) 700 64,183 (33,098) 1,090 39,012 71,887
Total comprehensive income for the 6 month period
Profit - - - - 6,359 6,359
Other comprehensive income - - - - - -
Total comprehensive income for
the 6 month period - - - - 6,359 6,359
Transaction with owners, recorded directly in equity
Dividends - - - - (4,725) (4,725)
Share based payment expense - - - 446 - 446
Total contribution by and transactions with the owners
- - - 446 (4,725) (4,279)
Balance at 30 April 2023 (unaudited) 700 64,183 (33,098) 1,536 40,646 73,967
Total comprehensive income for the 6 month period
Profit - - - - 12,597 12,597
Other comprehensive income - - - - - -
Total comprehensive income
for the 6 month period - - - - 12,597 12,597
Transaction with owners, recorded directly in equity
Dividends - - - - (2,625) (2,625)
Share based payment expense - - - 506 - 506
Total contribution by and transactions with the owners
- - - 506 (2,625) (2,119)
Balance at 31 October 2023 (audited) 700 64,183 (33,098) 2,042 50,618 84,445
Total comprehensive income for the 6 month period
Profit - - - - 5,083 5,083
Other comprehensive income - - - - - -
Total comprehensive income for
the 6 month period - - - - 5,083 5,083
Transaction with owners, recorded directly in equity
New share issuance 1 166 - - - 167
Dividends - - - - (5,223) (5,223)
Share based payment expense - - - 534 - 534
Total contribution by and transactions with the owners
1 166 - 534 (5,223) (4,522)
Balance at 30 April 2024 (unaudited) 701 64,349 (33,098) 2,576 50,478 85,006
Condensed consolidated cash flow statement
Note 6 months ended 30 April 2024 Unaudited 6 months ended 30 April 2023 Unaudited Year ended
31 October 2023 Audited
£000 £000 £000
Cash flow from operating activities
Profit for the period 5,083 6,359 18,956
Adjustments for:
Depreciation and amortisation 5,524 4,659 9,967
Financial expense 2,417 1,956 4,505
Profit on sale of property, plant and equipment (74) (156) (179)
Net gain on remeasurement of right-of-use assets and lease liabilities (29) (1) (4)
Compensation for post combination services 79 48 199
Equity settled share based payment expense 548 446 964
Taxation 1,796 1,901 5,902
15,344 15,212 40,310
(Increase) in trade and other receivables (9,398) (5,555) (3,737)
(Increase) in inventories (15,584) (12,912) (2,553)
Increase in trade and other payables 23,952 16,489 2,353
14,314 13,234 36,373
Tax paid (1,911) (1,528) (6,075)
Net cash inflow from operating activities 12,403 11,706 30,298
Cash flows from investing activities
Acquisition of property, plant and equipment (3,768) (1,629) (3,915)
Proceeds from sale of property, plant and equipment 143 269 473
Payment of compensation for post combination services (424) - -
Acquisition of subsidiary undertakings (including 2 (19,370) (19,593) (19,593)
overdrafts and cash acquired)
Net cash outflow from investing activities (23,419) (20,953) (23,035)
Cash flows from financing activities
Issuance of new shares 167 - -
Proceeds from new loan - 20,000 20,000
Net movement in invoice discounting 23,720 (3,538) (13,948)
Interest paid (2,417) (1,522) (4,248)
Net movement in bank trade loans 3,000 - -
Repayment of lease liabilities (3,889) (3,191) (6,555)
Dividends paid (5,223) (4,725) (7,350)
Net cash inflow/(outflow) from financing activities 15,358 7,024 (12,101)
Net increase/(decrease) in cash and cash equivalents 4,342 (2,223) (4,838)
Opening cash and cash equivalents 673 5,511 5,511
Cash and cash equivalents at period end 5,015 3,288 673
Notes
1 Accounting policies
Kitwave Group plc (the "Company") is a public company limited by shares and
incorporated, domiciled and registered in England in the UK. The registered
number is 9892174 and the registered address is Unit S3, Narvik Way, Tyne
Tunnel Trading Estate, North Shields, Tyne and Wear, NE29 7XJ.
The Company's principal activity is to act as a holding company for its
subsidiaries (together "the Group"), which together make up the Group's
consolidated financial information.
The condensed consolidated financial information presented in this statement
for the six months ended 30 April 2024 and the comparative figures for the six
months ended 30 April 2023 are neither audited nor reviewed.
The condensed consolidated financial information does not constitute statutory
accounts as defined in Section 435 of the Companies Act 2006. The statutory
accounts for the year ended 31 October 2023 have been delivered to the
Registrar of Companies and the report of the auditor was (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 condensed consolidated financial information does not include all the
information required for the full annual financial statements, however,
selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the Group's
financial position and performance since the last annual consolidated
financial statements.
The condensed consolidated financial information has been prepared in
accordance with IAS 34 Interim Financial Reporting and should be read in
conjunction the Group's last annual consolidated financial statements.
The condensed consolidated interim financial information does not constitute
financial statements within the meaning of Section 434 of the Companies Act
2006 and does not include all of the information and disclosures required for
full annual financial statements. It should therefore be read in conjunction
with the Group's Annual Report for the year ended 31 October 2023, which has
been prepared in accordance with UK-Adopted International Accounting Standards
and is available on the Group's investor website.
There have been no new accounting standards or changes to existing accounting
standards applied for the first time which have a material effect on these
interim results.
1.1 Critical accounting estimates and judgements
The critical accounting estimates and judgements affecting the Group are
unchanged from those set out in the Group's last annual consolidated financial
statements for the year ended 31 October 2023.
The Directors have reviewed financial forecasts and are satisfied that the
Group has sufficient levels of financial resources available to both fund
operations and to pursue its stated growth strategy. The Directors are
confident that the Group will have sufficient funds to meet its liabilities as
they fall due for the foreseeable future and therefore adopt the going concern
basis in preparing the condensed consolidated interim financial information.
1.2 Accounting policies
The accounting policies applied in preparing the condensed consolidated
interim financial information are the same as those applied in the preparation
of the consolidated financial statements for the year ended 31 October 2023,
as described in those financial statements.
2 Acquisitions
Acquisitions in the 6-month period ended 30 April 2024
WLG (Holdings) Limited ("Wilds")
On 17 November 2023, the Group acquired the entire share capital of WLG
(Holdings) Limited for a total consideration of £2,700,000. After
recognition of acquired intangible assets and associated deferred tax
liabilities, the resulting goodwill of £1,950,000 was capitalised and is
subject to annual impairment testing under IAS 36.
The acquisition had the following effect on the Group's assets and
liabilities:
Fair value
£000
Non-current assets
Tangible assets 109
Right-of-use assets 222
Investments 15
Current assets
Inventories 1,051
Trade and other receivables 748
Cash and cash equivalents 192
Total assets 2,337
Current liabilities
Lease liabilities (38)
Trade and other payables (1,180)
Corporation tax (140)
Non-current liabilities
Lease liabilities (199)
Deferred tax liabilities (30)
Total liabilities (1,587)
Net identifiable assets and liabilities 750
Goodwill 1,950
Total net assets acquired 2,700
Cash acquired (192)
Purchase consideration net of cash acquired 2,508
The business and its trading subsidiary, WLG Limited, were acquired as part of
the Group's growth strategy. Significant control was obtained through the
acquisition of 100% of the share capital of WLG (Holdings) Limited.
An internal valuation was performed to identify and intangible assets on
acquisition per IFRS 3. As a result of this valuation no material intangible
assets were identified.
Immediately prior to acquisition the business and its trading subsidiary
extended its accounting period by one month to 31 October 2023. In this
13-month period immediately prior to acquisition, the consolidated profit
after tax was £266,000.
Following acquisition, the business contributed revenue of £3,619,000 and
operating profit of £177,000 to the Group for the period to 29 February 2024
at which point the trade and assets of the business and its trading subsidiary
were hived up into H.B. Clark & Co (Successors) Limited, with the trade
continuing under this Group subsidiary.
Total Foodservice Solutions Limited ("Total Foodservice")
On 27 March 2024, the Group acquired the entire share capital of Total
Foodservice Solutions Limited for a total consideration of £21,000,000.
After recognition of acquired intangible assets and associated deferred tax
liabilities, the resulting goodwill of £9,460,000 was capitalised and is
subject to annual impairment testing under IAS 36.
The acquisition had the following effect on the Group's assets and
liabilities:
Book value Fair Value Adjustments Fair value
£000 £000 £000
Non-current assets
Intangible assets - 3,796 3,796
Tangible assets 3,737 - 3,737
Right-of-use assets 1,060 - 1,060
Investments 1 - 1
Current assets
Inventories 1,791 - 1,791
Trade and other receivables 1,963 - 1,963
Cash and cash equivalents 4,138 - 4,138
_______
Total assets 12,690 3,796 16,486
Current liabilities
Lease liabilities (204) - (204)
Trade and other payables (2,360) - (2,360)
Corporation tax (321) - (321)
Non-current liabilities
Lease liabilities (753) - (753)
Deferred tax liabilities (361) (947) (1,308)
Total liabilities (3,999) (947) (4,946)
Net identifiable assets and liabilities 8,691 2,849 11,540
Goodwill 9,460
Total net assets acquired 21,000
Cash acquired (4,138)
Purchase consideration net of cash acquired 16,862
The business and its dormant subsidiaries were acquired as part of the Group's
growth strategy. Significant control was obtained through the acquisition of
100% of the share capital of Total Foodservice Solutions Limited.
An independent valuation was performed to identify and intangible assets on
acquisition per IFRS 3. The provisional valuation has resulted in the
identification of intangible assets in relation to brand and customer
relationships which have been recognised with attributable fair values of
£183,000 and £3,613,000 respectively. The recognition of these intangible
assets resulted in deferred tax liabilities of £46,000 for the brand
intangible and £901,000 for the customer relationship intangible also being
recognised at acquisition. This valuation will be finalised by 31 October
2024.
The acquired undertakings made a profit after tax of £957,000 from the
beginning of its financial year on 1 May 2023 to the date of acquisition. In
its previous financial year, the profit after tax was £1,544,000.
Following acquisition, the business contributed revenue of £2,198,000 and
operating profit of £242,000 to the Group for the 6-month period ended 30
April 2024.
If the business had been acquired at the start of the Group's financial
period, being 1 November 2023, it would have added £12,048,000 to Group
revenue and an operating loss of £81,000 to Group operating profit for the
6-month period ended 30 April 2024.
On acquisition, an assessment was made regarding the fair value of tangible
assets which includes a freehold property. The result of an independent
assessment was no change to the net book value held in Total Foodservice
Solutions Limited's accounts.
3 Segmental information
The following analysis by segment is presented in accordance with IFRS 8 on the basis of those segments whose operating results are regularly reviewed by the Executive Board (the Chief Operating Decision Maker as defined by IFRS 8) to assess performance and make strategic decisions about allocation of resources
The Group has the following operating segments:
· Ambient: Provides delivered wholesale of ambient food, drink and
tobacco products;
· Frozen & Chilled: Provides delivered wholesale of frozen and
chilled food products; and
· Foodservice: Provides delivered wholesale of alcohol, frozen and
chilled food to trade customers.
Corporate contains the central functions that are not devolved to the business
units
These segments offer different products that attract different margins. They each have separate management teams.
The segments share a commonality in service being delivered wholesale of food
and drink products. The Group therefore benefits from a range of expertise,
cross-selling opportunities and operational synergies in order to run each
segment as competitively as possible.
The Group's forward-looking strategy is to provide enhanced customer service
by making available the wider Group product range to its existing customer
base. As a result, the Board will be assessing the segments based on customer
type going forward with the customers in the Ambient and Frozen & Chilled
divisions operating in the retail and wholesale channels.
The following analysis shows how this development is now being monitored
whilst demonstrating the link to the previously reported segmental information
for reference.
The presentation convention adopted in these financial statements is to show
the three operating segments as this is how the Board of Directors has
assessed performance during the period.
Each segment is measured on its adjusted operating profit and internal
management reports are reviewed monthly by the Board. This performance
measure is deemed the most relevant by the Board to evaluate the results of
the segments relative to entities operating in the same industry.
3 Segmental information (continued)
Six months ended 30 April 2024 Ambient Frozen & Total retail & wholesale Foodservice Corporate Total
Chilled
£000 £000 £000 £000 £000 £000
Revenue 99,073 104,933 204,006 92,954 - 296,960
Inter-segment revenue 9,198 1,878 11,076 449 - 11,525
Segment revenue 108,271 106,811 215,082 93,403 - 308,485
Adjusted EBITDA* 5,694 4,936 10,630 7,875 (2,642) 15,863
Amortisation of intangibles - (31) (31) (3) (26) (60)
Depreciation (952) (2,310) (3,262) (1,643) (62) (4,967)
Adjusted operating profit* 4,742 2,595 7,337 6,229 (2,730) 10,836
Group management charge (734) (1,026) (1,759) (1,377) 3,137 -
Amortisation of intangible assets arising on acquisition - - - - (497) (497)
Acquisition expense - - - (416) - (416)
Compensation for post combination services - (79) (79) - - (79)
Share based payment expense - - - - (548) (548)
Interest expense (471) (613) (1,084) (436) (897) (2,417)
Segment profit/(loss) before tax 3,537 877 4,414 4,000 (1,535) 6,879
Segment assets 52,081 74,670 126,751 69,468 71,910 268,129
Segment liabilities (39,812) (75,410) (115,222) (46,250) (21,651) (183,123)
Segment net assets/(liabilities) 12,269 (740) 11,529 23,218 50,259 85,006
Within Corporate assets is £70,090,000 of goodwill on consolidation. This is
allocated to the trading segments as follows:
Goodwill by segment 13,516 12,499 26,015 44,075 - 70,090
3 Segmental information (continued)
Six months ended 30 April 2023 Ambient Frozen & Total retail & wholesale Foodservice Corporate Total
Chilled
£000 £000 £000 £000 £000 £000
Revenue 98,124 96,096 194,220 80,730 - 274,950
Inter-segment revenue 6,925 1,334 8,259 322 - 8,581
Segment revenue 105,049 97,430 202,479 81,052 - 283,531
Adjusted EBITDA* 5,554 4,184 9,738 8,711 (2,432) 16,017
Amortisation of intangibles - (40) (40) (3) (23) (66)
Depreciation (822) (1,944) (2,766) (1,398) (46) (4,210)
Adjusted operating profit* 4,732 2,200 6,932 7,310 (2,501) 11,741
Group management charge (865) (420) (1,285) (1,250) 2,535 -
Amortisation of intangible assets arising on acquisition - - - - (383) (383)
Acquisition expense - - - - (648) (648)
Compensation for post combination services - (48) (48) - - (48)
Share based payment expense - - - - (446) (446)
Interest expense (433) (623) (1,056) (335) (565) (1,956)
Segment profit/(loss) before tax 3,434 1,109 4,543 5,725 (2,008) 8,260
Segment assets 43,807 65,532 109,339 46,140 66,054 221,533
Segment liabilities (32,356) (58,449) (90,805) (31,605) (25,156) (147,566)
Segment net assets 11,451 7,083 18,534 14,535 40,898 73,967
Within Corporate assets is £58,680,000 of goodwill on consolidation. This is
allocated to the trading segments as follows:
Goodwill by segment 13,516 12,499 26,015 32,665 - 58,680
3 Segmental information (continued)
Year ended 31 October 2023 Ambient Frozen & Total retail & wholesale Foodservice Corporate Total
Chilled
£000 £000 £000 £000 £000 £000
Revenue 207,195 216,399 423,594 178,626 - 602,220
Inter-segment revenue 15,561 3,392 18,953 625 - 19,578
Segment revenue 222,756 219,791 442,547 179,251 - 621,798
Adjusted EBITDA* 12,291 14,115 26,406 20,030 (5,295) 41,141
Amortisation of intangibles - (80) (80) (6) (47) (133)
Depreciation (1,773) (4,130) (5,903) (2,995) (94) (8,992)
Adjusted operating profit* 10,518 9,905 20,423 17,029 (5,436) 32,016
Group management charge (1,230) (840) (2,070) (1,750) 3,820 -
Amortisation of intangible assets arising on acquisition - - - - (842) (842)
Acquisition expense - - - - (648) (648)
Compensation for post combination services - (199) (199) - - (199)
Share based payment expense - - - - (964) (964)
Interest expense (918) (1,344) (2,262) (689) (1,554) (4,505)
Segment profit/(loss) before tax 8,370 7,522 15,892 14,590 (5,624) 24,858
Segment assets 43,697 56,373 100,070 44,586 64,929 209,585
Segment liabilities (28,380) (45,691) (74,071) (29,288) (21,781) (125,140)
Segment net assets 15,317 10,682 25,999 15,298 43,148 84,445
Within Corporate assets is £58,680,000 of goodwill on consolidation. This is
allocated to the trading segments as follows:
Goodwill by segment 13,516 12,499 26,015 32,665 - 58,680
An analysis of revenue by destination is given below:
Geographical information:
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
United Kingdom 294,738 272,280 597,292
Overseas 2,222 2,670 4,928
Group revenue 296,960 274,950 602,220
No one customer accounts for more than 10% (H1 2023: 10%; FY2023: 9%) of Group
revenue.
4 Other operating income
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Net gain on disposal of fixed assets 74 156 179
Net (loss) on foreign exchange (5) - -
Net gain on remeasurement of right-of-use assets and lease liabilities
29 1 4
98 157 183
5 Expenses
Included in profit/loss are the following:
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Depreciation of tangible assets:
Owned 1,343 1,138 2,253
Right-of-use assets 3,624 3,072 6,739
Amortisation of intangible assets 557 449 975
Expenses relating to short term leases and low value assets
1,327 1,018 1,992
Impairment loss on trade receivables 62 237 675
The Group incurred a number of expenses not relating to the principal trading
activities of the Group as follows:
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
Exceptional expenses £000 £000 £000
Acquisition expenses 416 648 648
Compensation for post combination services
79 48 199
Total exceptional expenses 495 696 847
Share based payment expense 548 446 964
Total exceptional expenses and share based payments
1,043 1,142 1,811
The Board consider the exceptional items to be non-recurring in nature. Both
exceptional and share-based payment expenses are adjusted for in the statement
of profit and loss to arrive at the adjusted EBITDA. This measure provides the
Board with a better understanding of the Group's operating performance.
Acquisition expenses include the legal and professional fees connected to the
acquisition of WLG Holdings Limited and Total Foodservice Solutions Limited
completed in the six-month period to 30 April 2024. In the six-month period
ended 30 April 2023 and the year ended 31 October 2023 these expenses were
incurred in connection with the acquisition of Westcountry Food Holdings Ltd
completed on 9 December 2022.
Compensation for post-combination services relates to the value of a liability
in connection the acquisition of the remaining share capital of Central
Supplies (Brierley Hill) Ltd which is subject to an agreement to acquire which
can now be called at any time.
Share-based payments relate to the Management Incentive Plan ("MIP") and
Long-Term Incentive Plan ("LTIP") and are non-cash expenses.
6 Earnings per share
Basic earnings per share
Basic earnings per share for the six-month period ending 30 April 2024, and
the previous six-month period ending 30 April 2023 and the year ended 31
October 2023 is calculated by dividing profit attributable to ordinary
shareholders by the weighted average number of ordinary shares outstanding
during each period as calculated below.
Diluted earnings per share
Diluted earnings per share for the six-month period ending 30 April 2024, and
the previous six-month period ending 30 April 2023 and the year ended 31
October 2023 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. In this case dilutive
potential ordinary shares include issued equity warrants outstanding during
each period and shares that may vest under the terms of equity incentive
plans, as calculated below.
The largest proportion of the potential dilution arises from the equity
incentive plans and in particular the Executive Management Incentive Plan (the
"MIP") for which the performance period ends on 31 October 2024. The growth
shares related to the MIP entitle the participants to place a put option on
the Company in order to receive up to a maximum of 4 per cent. of the
Company's market value (measured at the time the option is exercised).
Profit attributable to ordinary shareholders
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Profit attributable to all shareholders 5,083 6,359 18,956
pence pence £
Basic earnings per ordinary share 7.3 9.1 27.1
Diluted earnings per ordinary share 6.9 8.7 26.0
Weighted average number of ordinary shares
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
Number Number Number
Weighted average number of ordinary shares (basic) during the period 70,032,967 70,000,000 70,000,000
Weighted average number of ordinary shares (diluted) during the period 73,158,081 72,946,766 73,047,991
Alternative performance measure glossary
This report provides alternative performance measures ("APMs"), which are note
defined or specified under the requirements of International Financial
Reporting Standards. The Board believes that these APMs provide readers with
important additional information on the Group.
Alternative performance measure Definition and purpose
Adjusted operating profit Represents the operating profit prior to exceptional (income) / expenses,
share based payment expenses and amortisation of intangible assets recognised
on acquisitions. This measure is consistent with how the Group measures
performance and is reported to the Board.
6months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Total operating profit 9,296 10,216 29,363
Amortisation of intangible assets arising on acquisition
497 383 842
Acquisition expenses 416 648 648
Compensation for post combination services
79 48 199
Share based payment expense
548 446 964
Adjusted operating profit
10,836 11,741 32,016
Adjusted EBITDA Represents the operating profit prior to exceptional (income) / expenses,
share based payment expenses, fixed asset depreciation and intangible
amortisation. This measure is consistent with how the Group measures trading
and cash generative performance and is reported to the Board.
6months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Total operating profit 9,296 10,216 29,363
Amortisation of intangible assets
557 449 975
Depreciation 4,967 4,210 8,992
Acquisition expenses 416 648 648
Compensation for post combination services
79 48 199
Share based payment expense
548 446 964
Adjusted EBITDA 15,863 16,017 41,141
Pre-tax operational cash conversion Represents the cash generated from operating activities pre tax as a
proportion of cash flow from operating activities pre movements in working
capital and tax. This measure informs the Board of the Group's cash conversion
from operating activities and is used to monitor liquidity by the Board.
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Net cash inflow from operating activities
12,403 11,706 30,298
Tax paid 1,911 1,528 6,075
Cash flow from operating activities pre-tax and compensation for post
combination services (1)
14,314 13,234 36,373
Movement in working capital
1,030 1,978 3,937
Cash flow from operating activities pre-tax and compensation for post
combination services and movement in working capital (2)
15,344 15,212 40,310
Pre-tax operational cash conversion (1) divided by (2)
93% 87% 90%
Adjusted EBITDA
Represents the operating profit prior to exceptional (income) / expenses,
share based payment expenses, fixed asset depreciation and intangible
amortisation. This measure is consistent with how the Group measures trading
and cash generative performance and is reported to the Board.
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Total operating profit 9,296 10,216 29,363
Amortisation of intangible assets
557 449 975
Depreciation 4,967 4,210 8,992
Acquisition expenses 416 648 648
Compensation for post combination services
79 48 199
Share based payment expense
548 446 964
Adjusted EBITDA 15,863 16,017 41,141
Pre-tax operational cash conversion
Represents the cash generated from operating activities pre tax as a
proportion of cash flow from operating activities pre movements in working
capital and tax. This measure informs the Board of the Group's cash conversion
from operating activities and is used to monitor liquidity by the Board.
6 months ended 6 months ended Year ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Net cash inflow from operating activities
12,403 11,706 30,298
Tax paid 1,911 1,528 6,075
Cash flow from operating activities pre-tax and compensation for post
combination services (1)
14,314 13,234 36,373
Movement in working capital
1,030 1,978 3,937
Cash flow from operating activities pre-tax and compensation for post
combination services and movement in working capital (2)
15,344 15,212 40,310
Pre-tax operational cash conversion (1) divided by (2)
93% 87% 90%
After tax return on invested capital Represents adjusted profit after tax for the 12 months ending on the period
end date as a proportion of invested capital as at the period end date. This
measure informs the Board of how effective the Group is in generating returns
from the capital invested.
LTM ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Adjusted operating profit 31,111 25,906 32,016
Operating lease interest (1,837) (1,510) (1,656)
29,274 24,396 30,360
Tax charge at effective rate of tax of 25% (FY22: 23%)
(7,319) (5,489) (6,831)
Adjusted operating profit after tax (1) 21,956 18,907 23,529
Invested capital comprising:
Interest bearing loans and borrowings
33,125 16,816 6,405
Lease liabilities 35,136 29,991 32,669
Revolving Credit Facility 20,000 20,000 20,000
Share capital 701 700 700
Share premium 64,349 64,143 64,183
Less cash at bank and in hand
(5,015) (3,288) (673)
Total invested capital (2) 148,296 128,402 123,284
After tax return on invested capital (1) divided by (2)
15% 15% 19%
Return on net assets Represents adjusted profit after tax as a proportion of the Group's investment
in fixed assets and working capital. This measure informs the Board of how
effective the Group is in generating returns from its fixed assets and net
working capital.
LTM ended
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Adjusted operating profit 31,111 25,906 32,016
Tax charge at effective rate of tax of 25% (FY22:23%) (7,778) (5,829) (7,204)
Adjusted operating profit after tax (1) 23,333 20,077 24,812
Fixed assets and net working capital comprising:
Intangible assets* 663 775 728
Fixed assets 22,767 16,404 16,614
Right-of-use assets 32,611 26,575 29,716
Investments 61 45 45
Inventories 53,836 45,769 35,410
Trade and other receivables 75,677 65,388 63,569
Trade and other payables (90,729) (77,767) (63,596)
Liability for post combination services** 661 854 1,006
Total invested capital (2) 94,844 77,268 83,492
After tax return on invested capital (1) divided by (2) 25% 26% 30%
*excluding acquired intangibles arising on acquisition
**adjustment to exclude the liability for post combination services from trade
and other payables
Leverage (including IFRS 16 debt) Management assess leverage by reference to adjusted EBITDA for the 12 months
ending on the period end date against net debt including and excluding IFRS 16
& lease liabilities and including the liability for post combination services
held within other creditors, as at the period end date. This indicates how
Leverage (excluding IFRS 16 debt) much income is available to service debt before interest, tax, depreciation
and amortisation.
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Adjusted EBITDA (1) 40,987 34,369 41,141
Invoice discounting advances
30,125 16,816 6,405
Bank trade loans 3,000 - -
Lease liabilities 35,136 29,991 32,669
Revolving Credit Facility 20,000 20,000 20,000
Liability for post combination services
661 854 1,006
Cash at bank and in hand (5,015) (3,288) (673)
Net debt (2) 83,907 64,373 59,407
Leverage (including IFRS 16 debt) (2) divided by (1)
2.0x 1.9x 1.4x
IFRS 16 lease liabilities (26,462) (26,329) (26,197)
Net debt excluding IFRS 16 lease liabilities (3)
57,445 38,044 33,210
Leverage (excluding IFRS 16 lease debt) (3) divided by (1)
1.4x 1.1x 0.8x
Return on net assets
Represents adjusted profit after tax as a proportion of the Group's investment
in fixed assets and working capital. This measure informs the Board of how
effective the Group is in generating returns from its fixed assets and net
working capital.
30 April 2024
Unaudited
LTM ended
30 April 2023 Unaudited
31 October 2023 Audited
£000
£000
£000
Adjusted operating profit
31,111
25,906
32,016
Tax charge at effective rate of tax of 25% (FY22:23%)
(7,778)
(5,829)
(7,204)
Adjusted operating profit after tax (1)
23,333
20,077
24,812
Fixed assets and net working capital comprising:
Intangible assets*
663
775
728
Fixed assets
22,767
16,404
16,614
Right-of-use assets
32,611
26,575
29,716
Investments
61
45
45
Inventories
53,836
45,769
35,410
Trade and other receivables
75,677
65,388
63,569
Trade and other payables
(90,729)
(77,767)
(63,596)
Liability for post combination services**
661
854
1,006
Total invested capital (2)
94,844
77,268
83,492
After tax return on invested capital (1) divided by (2)
25%
26%
30%
*excluding acquired intangibles arising on acquisition
**adjustment to exclude the liability for post combination services from trade
and other payables
Leverage (including IFRS 16 debt)
&
Leverage (excluding IFRS 16 debt)
Management assess leverage by reference to adjusted EBITDA for the 12 months
ending on the period end date against net debt including and excluding IFRS 16
lease liabilities and including the liability for post combination services
held within other creditors, as at the period end date. This indicates how
much income is available to service debt before interest, tax, depreciation
and amortisation.
30 April 2023 Unaudited
30 April 2024 31 October 2023 Audited
Unaudited
£000 £000 £000
Adjusted EBITDA (1) 40,987 34,369 41,141
Invoice discounting advances
30,125 16,816 6,405
Bank trade loans 3,000 - -
Lease liabilities 35,136 29,991 32,669
Revolving Credit Facility 20,000 20,000 20,000
Liability for post combination services
661 854 1,006
Cash at bank and in hand (5,015) (3,288) (673)
Net debt (2) 83,907 64,373 59,407
Leverage (including IFRS 16 debt) (2) divided by (1)
2.0x 1.9x 1.4x
IFRS 16 lease liabilities (26,462) (26,329) (26,197)
Net debt excluding IFRS 16 lease liabilities (3)
57,445 38,044 33,210
Leverage (excluding IFRS 16 lease debt) (3) divided by (1)
1.4x 1.1x 0.8x
Reconciliation between existing and acquired operating profit for the period
Note Existing operations Acquisitions Total 6 months ended Year ended
31 October 2023 Audited
6 months ended 30 April 2023 Unaudited
30 April 2024 Unaudited
£000 £000 £000 £000 £000
Revenue 3 291,143 5,817 296,960 274,950 602,220
Cost of sales (228,807) (4,416) (233,223) (215,621) (470,095)
Gross profit 62,336 1,401 63,737 59,329 132,125
Other operating income/ (expense) 4 98 - 98 157 183
Distribution expenses (27,549) (400) (27,949) (26,262) (54,570)
Administrative expenses (26,008) (582) (26,590) (23,008) (48,375)
Operating profit 8,877 419 9,296 10,216 29,363
Analysed as:
Adjusted EBITDA 15,382 481 15,863 16,017 41,141
Amortisation of intangible assets 5 (557) - (557) (449) (975)
Depreciation 5 (4,905) (62) (4,967) (4,210) (8,992)
Acquisition expenses 5 (416) - (416) (648) (648)
Compensation for post combination services 5 (79) - (79) (48) (199)
Share based payment expense 5 (548) - (548) (446) (964)
Total operating profit 8,877 419 9,296 10,216 29,363
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