REG - McColl's Retail Grp - Final Results <Origin Href="QuoteRef">MCLSM.L</Origin> - Part 2
01/03/2016 07:10
- Part 2: For the preceding part double click ID:nRSA5450Qa
47,836 - 69,302 117,243
Profit for the period - - - 16,097 16,097
Actuarial gain recognised on pension scheme - - - 3,306 3,306
Total comprehensive income for the period - - - 19,403 19,403
Dividends paid - - - (10,681) (10,681)
Balance at 29 November 2015 105 47,836 - 78,024 125,965
Consolidated cash flow statement
52 week period ended 29 November 2015
Notes 52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Net cash provided by operating activities 14 43,522 34,615
Cash flows from investing activities
Acquisition of property, plant and equipment (17,593) (15,188)
Proceeds from sale of property, plant and equipment 7,940 11,317
Acquisition of businesses, net of cash acquired 10 (14,239) (16,827)
Finance income 165 121
Net cash used in investing activities (23,727) (20,577)
Cash flows from financing activities
Repayment of loans (1,500) (109,414)
Repayment of hire purchase loans (1,658) (2,276)
New loans received - 46,000
Issue costs (140) (4,099)
Proceeds on issue of shares - 49,802
Dividends paid 7 (10,681) (1,780)
Finance expense (2,503) (4,186)
Hire purchase interest paid 5 (178) (177)
Net cash used in financing activities (16,660) (26,130)
Increase/(decrease) in cash and cash equivalents 3,135 (12,092)
Cash and cash equivalents at beginning of period 11,396 23,488
Cash and cash equivalents at end of period 14,531 11,396
1. Basis of preparation
McColl's Retail Group plc (the "company") is a company incorporated in the
United Kingdom under the Companies Act. The address of the company's
registered office is McColl's Retail Group, McColl's House, Ashwells Road,
Brentwood, Essex CM15 9ST. The principal activity of the company and its
subsidiaries (collectively, the "group") is the provision of convenience and
newsagent services in the UK.
The group financial statements for 2015 consolidate the financial statements
of McColl's Retail Group plc and all its subsidiary undertakings drawn up to
29 November 2015. The group's accounting period covers the 52 weeks ended 29
November 2015. The comparative period covered the 53 weeks ended 30 November
2014. Acquisitions are accounted for under the acquisition method of
accounting.
The group financial statements have been prepared based on the company's
financial statements which are prepared in accordance with International
Financial Reporting Standards as adopted for use in the EU on the going
concern basis and in accordance with IFRS and IFRS Interpretations Committee
('IFRIC') interpretations, as adopted by the European Union and with those
parts of the Companies Act 2006 applicable to companies reported under IFRS.
The consolidated financial information is presented in sterling, the group's
functional currency, and has been rounded to the nearest thousand (£'000).
The financial information set out above does not constitute the company's
statutory accounts for the years ended 29 November 2015 or 30 November 2014,
but is derived from those accounts. Statutory accounts for 2014 have been
delivered to the Registrar of Companies and those for 2015 will be delivered
following the company's annual general meeting. The auditors have reported on
those accounts; their reports were unqualified, did not draw attention to any
matters by way of emphasis without qualifying their report and did not contain
statements under s498(2) or (3) Companies Act 2006.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs), this announcement does
not itself contain sufficient information to comply with IFRSs. The Company
expects to publish full financial statements that comply with IFRSs in March
2016.
The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
Going concern
In making their going concern assessment the directors have considered the
group's business activities, its financial position, the market in which it
operates and the factors likely to affect its future development.
The directors have reviewed the group's forecasts, taking into account a range
of sensitivities, and how they impact headroom against its bank facilities,
and its ability to meet its capital investment and operational needs.
In August 2015, the company announced it had signed an amended £85.0m
revolving credit facility plus a £15.0m accordion option expiring in August
2020. The group has net current liabilities of £35.8m at the period end. The
directors have additionally considered this position to determine if it
presents any going concern issues. The group is profitable and cash generative
and is supported by the revolving credit facility. As at 29 November 2015
£44.5m was drawn against the facility, and therefore there is sufficient
headroom to meet the group's debts as they fall due.
The directors believe the group is in a strong financial position due to its
profitable operations and strong cash generation and that the group has
adequate resources to continue in operation for the foreseeable future. For
this reason, they continue to adopt the going concern basis in preparing the
financial statements.
Adoption of new and revised standards
In the current financial period, the group has applied for the first time IFRS
2 'Share-based Payment' and IFRS 5 'Non-current Assets Held for Sale and
Discontinued Operations'.
New standards in issue but not yet effective
A complete list of standards that are in issue but not yet effective is
included with our full accounting policies in an appendix to the Annual
Report.
With the exception of IFRS 16, which is under review, the directors anticipate
that the adoption of these standards and interpretations in future periods
will have no significant impact of the group's financial statements when the
relevant standards come into effect.
2. Segmental analysis and revenue
In accordance with IFRS8 'Operating segments' an operating segment is defined
as a business activity whose operating results are reviewed by the chief
operating decision maker and for which discrete information is available.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker, as required by
IFRS8. The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the board of directors. The principal activities of the group
are currently managed as one segment. Consequently all activities relate to
this segment, being the operation of convenience and newsagent stores in the
UK.
An analysis of the group's revenue is as follows (all continuing operations):
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Sale of goods 932,227 922,420
Property rental income 2,693 3,253
Other operating income 20,926 29,239
23,619 32,492
Investment revenue (note 5) 165 121
Total revenue as defined by IAS18 956,011 955,033
3. Exceptional items
Due to their significance or one-off nature, certain items have been
classified as exceptional as follows:-
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Redundancy and restructuring costs1 625 -
Costs associated with IPO included within administrative expenses 2 - 1,823
Share-based payments included within administrative expenses 3 - 5,532
Property related costs included within administrative expenses 4 - 2,440
Post office costs included within administrative expenses 5 - 392
Post office income included within other operating income 5 - (6,743)
- 3,444
Unamortised financing costs included in finance expense 6 - 3,166
625 6,610
Tax effect 7 (127) (1,288)
498 5,322
1Redundancy and restructuring costs
During the 52 weeks ended 29 November 2015 one-off employee related costs
associated with the field operations and head office re-structure totalled
£625,000.
2Costs associated with IPO
During the 53 weeks ended 30 November 2014 one-off IPO costs of £4,539,000
were incurred of which £1,823,000 was charged to the income statement and
£2,716,000 was charged to the share premium account as being directly related
to the issue of new shares.
3Share-based payments
During the 53 weeks ended 30 November 2014 share-based payments totalling
£5,532,000 were made by way of an allocation of shares to employees prior to
the IPO for nil consideration.
4Property related costs
During the 53 weeks ended 30 November 2014 a provision of £2,440,000 was made
for the onerous lease relating to the group's former head office. The
provision was made to recognise an expected shortfall in rental income
compared with rent payable and other property related costs.
5Post office income
During the 53 weeks ended 30 November 2014 the group received £6,743,000
income from the Post Office in relation to an agreement to convert 191 of the
group's existing post offices to a new local format. The group incurred costs
of £392,000 associated with the conversions.
6Unamortised financing costs included in finance expense in 2014
On 4 March 2014 the group completed an early debt refinancing which resulted
in the write-off of £3,166,000 of unamortised financing costs.
7 Tax effect of exceptional items
The tax effect of the exceptional items is a credit of £127,000 (2014: credit
£1,288,000).
4. Adjusted EBITDA
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Operating profit before exceptional items 24,271 25,477
Depreciation and amortisation 13,678 12,676
Impairment of property, plant and equipment 180 519
Goodwill impairment losses - 382
Goodwill impairment correction to prior period - (631)
Profit on disposal of fixed assets (437) (1,099)
Negative goodwill on acquisitions - (66)
37,692 37,258
5. Net finance costs
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Finance expense
Bank loans and overdrafts (2,192) (5,280)
Hire purchase interest (178) (177)
Unwinding of the discount included in provisions (19) (187)
Amortisation of issue costs (296) (3,820)
Loss on fair value movement on interest rate swap - (34)
Other (15) (19)
Total finance expense (2,700) (9,517)
Finance income
Interest receivable 165 112
Other - 9
Total finance income 165 121
Net finance costs (2,535) (9,396)
6. Taxation
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Income statement
Current tax:
Current tax on profit for the period 4,556 3,400
Adjustments in respect of prior periods 10 (59)
4,566 3,341
Deferred tax:
Origination and reversal of temporary differences (13) (715)
Associated with pension deficit 163 178
Arising from change in tax rate (444) -
Adjustments in respect of prior periods 742 (74)
448 (611)
Income tax expense for the period 5,014 2,730
Other comprehensive income
Deferred tax in respect of actuarial valuation of retirement benefits 720 138
Arising from change in rate of tax (26) -
694 138
The tax charge for the period can be reconciled to accounting profit as
follows:
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Profit before tax 21,111 12,637
Profit before tax multiplied by the blended applicable corporation tax rate for 2015 of 20.34% (2014: 21.67%) 4,294 2,738
Disallowed expenses and non-taxable income 412 125
Adjustments in respect of prior periods 752 (133)
Arising from change in rate of tax (444) -
Total tax expense 5,014 2,730
Included within the adjustments in respect of prior periods is a one off
historic adjustment for deferred tax of £712k. Excluding the one off
adjustment the effective tax rate is 20.4%.
Changes in tax rates and factors affecting the future tax charge
In July 2015, the UK Government announced its intention to reduce the
corporation tax rate to 19% with effect from 1 April 2017 and 18% with effect
from 1 April 2020. These changes were substantively enacted at the balance
sheet date and therefore have been reflected in the deferred tax provisions.
7. Dividends
The board has recommended a final dividend of 6.8 pence per share (2014:
6.8p), totalling £7,120,000 (2014: £7,120,000), subject to shareholder
approval at the annual general meeting to be held on 19 April 2016. The final
dividend will be paid on 31 May 2016 to those shareholders on the register at
the close of business on 29 April 2016. The payment of this dividend will not
have any tax consequences for the group. The interim dividend, declared and
paid, was 3.4 pence per share (2014: 1.7p), totalling £3,560,000 (2014:
£1,780,000).
8. Earnings per share
52 weeks ended 29 November 53 weeks ended 30 November2014
2015
Basic weighted average number of shares 104,712,042 97,432,203
Dilutive effect of warrant shares issued - 356,129
Diluted weighted average number of shares 104,712,042 97,788,332
Profit attributable to ordinary shareholders (£'000) 16,097 9,907
Basic earnings per share 15.4p 10.2p
Diluted earnings per share 15.4p 10.1p
Adjusted earnings per share: £'000 £'000
Profit attributable to ordinary shareholders 16,097 9,907
Exceptional items (note 3) 625 6,610
Tax effect of adjustments (note 3) (127) (1,288)
Profit after tax and before exceptional items 16,595 15,229
Prior year deferred tax adjustment (note 6) 712 -
Adjusted profit after tax and before exceptional items 17,307 15,229
Adjusted earnings per share (pre tax adjustment) 15.9p 15.6p
Adjusted earnings per share (post tax adjustment) 16.5p -
9. Intangible assets
Otherintangible assets£'000 Goodwill£'000 Total£'000
Cost
At 24 November 2013 4,502 135,935 140,437
Additions 585 6,235 6,820
Deferred tax asset movement - 56 56
Disposals (1) (558) (559)
At 30 November 2014 5,086 141,668 146,754
Additions 620 8,711 9,331
Fair value adjustment to goodwill - (1,276) (1,276)
Disposals - (349) (349)
Transferred to assets held for sale - (1,223) (1,223)
At 29 November 2015 5,706 147,531 153,237
Accumulated amortisation and impairment
At 24 November 2013 2,361 5,582 7,943
Provision 687 - 687
Impairment losses - 382 382
Correction to prior year impairment charge - (631) (631)
Disposals (1) (777) (778)
At 30 November 2014 3,047 4,556 7,603
Provision 756 - 756
Impairment of disposals - (322) (322)
Transferred to assets held for sale - (716) (716)
At 29 November 2015 3,803 3,518 7,321
Net book value
As of 30 November 2014 2,039 137,112 139,151
As of 29 November 2015 1,903 144,013 145,916
10. Business combinations
During the period, the group made 60 acquisitions, none of which was
individually considered material to the group. The cash consideration for
these acquisitions and the assets acquired are summarised as follows:
52 weeks ended 29 November 53 weeks ended 30 November2014£'000
2015£'000
Tangible fixed assets 5,667 9,246
Inventory 1,169 1,412
Goodwill (net of negative goodwill) 7,591 6,225
Deferred tax liability (260) (557)
Deferred tax asset 72 501
Cash consideration 14,239 16,827
11. Borrowings
Details of loans and credit facilities are as follows:
29 November 30 November
2015£'000 2014£'000
Amounts falling due:
In more than two years but not more than five years 44,500 46,000
Total borrowings 44,500 46,000
Less: unamortised issue costs (1,288) (1,148)
43,212 44,852
Less: current borrowings (net of amortised issue costs) - -
Non-current borrowings 43,212 44,852
The long term loans are secured by a fixed charge over the group's head office
property together with a floating charge over the company's assets.
On 15 August 2015 the Group completed and signed an amended £85m revolving
credit facility and a £15m accordion facility for the group. This facility
amends the group's existing £85m plus £15m accordion facilities which were due
to expire in July 2018. The new facility will be in place until August 2020 at
margins of 1.5% above LIBOR. The current facility drawn as at 29 November
2015 is £44,500,000.
Details of loans and hire purchase obligations repayable within two to five
years are as follows:
29 November 30 November
2015£'000 2014£'000
Revolving facility available until 31 August 2020 at 1.5% above LIBOR 44,500 46,000
Hire purchase obligations 1,127 836
45,627 46,836
12. Net debt
29 November 30 November2014£'000
2015£'000
Cash at bank and in hand 14,531 11,396
Loans due:
In more than two years but not more than five years (44,500) (46,000)
Total borrowings (44,500) (46,000)
Less: unamortised issue costs 1,288 1,148
(43,212) (44,852)
Amounts due under hire purchase obligations (2,894) (3,909)
(46,106) (48,761)
Net debt (31,575) (37,365)
13. Authorised, issued and fully paid share capital
Number of shares Share capital £'000 Share premium £'000
Issued ordinary shares of £0.001 at 30 November 2014 104,712,042 105 47,836
Issued ordinary shares of £0.001 at 29 November 2015 104,712,042 105 47,836
Voting rights
The ordinary shares rank equally for voting purposes. On a show of hands each
shareholder has one vote and on a poll each shareholder has one vote per
ordinary share held. Each ordinary share ranks equally for any dividend
declared. Each ordinary share ranks equally for any distributions made on a
winding up of the group. Each ordinary share ranks equally in the right to
receive a relative proportion of shares in the event of a capitalisation of
reserves.
14. Notes to the cash flow statement
52 weeks ended 29 November 53 weeks ended 30 November
2015£'000 2014£'000
Profit for the period 16,097 9,907
Income and expenses not affecting operating cash flows
Depreciation and amortisation 13,678 12,676
Impairment losses 180 270
Income tax 5,014 2,730
Finance expense 2,700 9,517
Finance income (165) (121)
Share based payment charge - 5,532
Profit on disposal of fixed assets (437) (1,099)
Negative goodwill - (66)
37,067 39,346
Changes in operating assets and liabilities (including assets held for sale)
Decrease in trade receivables 89 53
Decrease in other receivables 15 2,669
Increase in inventory (6,581) (121)
Increase/(decrease) in trade payables 13,857 (3,431)
Increase/(decrease) in other payables 4,649 (1,726)
Decrease in pensions (1,784) (1,383)
Increase in provisions 280 1,635
Cash generated by operations 47,592 37,042
Income taxes paid (4,070) (2,427)
Net cash provided by operating activities 43,522 34,615
Analysis of net debt
At 30 November 2014£'000 Cash flow£'000 Othernon-cash movements£'000 At 29 November 2015£'000
Cash and cash equivalent 11,396 3,135 - 14,531
Borrowings (44,852) 1,500 140 (43,212)
Amounts due under hire purchase obligations (3,909) 1,015 - (2,894)
(37,365) 5,650 140 (31,575)
15. Related party transactions
Only the directors and senior managers are deemed to be key management
personnel. It is the board which has responsibility for planning, directing
and controlling the activities of the group. All transactions are on an arm's
length basis and no period end balances have arisen as a result of these
transactions.
Remuneration of key management personnel
The remuneration of the directors, who are the key management personnel of the
group, is set out below in aggregate for each of the categories specified in
IAS24 related party disclosures.
29 November 30 November2014£'000
2015£'000
Short-term employee benefits 1,872 2,816
Compensation for loss of office 259 282
Share-based payments - 5,513
2,131 8,611
There were no material transactions or balances between the group and its key
management personnel or members of their close family.
Disclosure of Home Member State
For the purposes of the Transparency Directive, the Home Member State of
McColls Retail Group plc is the United Kingdom.
This information is provided by RNS
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