REG - Brown (N.) Group PLC - Final Results <Origin Href="QuoteRef">BWNG.L</Origin> - Part 3
27/04/2017 07:06
- Part 3: For the preceding part double click ID:nRSa4728Db
53.2 134.9 188.1
Additions - 3.7 3.7
Reclassification 5.9 (5.9) -
As at 4 March 2017 59.1 132.7 191.8
Accumulated depreciation and impairment
At 28 February 2015 12.2 94.9 107.1
Charge for the period 0.9 5.1 6.0
Eliminated on disposals - (1.7) (1.7)
As at 27 February 2016 13.1 98.3 111.4
Charge for the period 1.1 5.8 6.9
Reclassification - - -
As at 4 March 2017 14.2 104.1 118.3
Carrying amounts
As at 4 March 2017 44.9 28.6 73.5
As at 27 February 2016 40.1 36.6 76.7
As at 28 February 2015 41.0 29.5 70.5
Assets in the course of construction included in fixtures and equipment at the period end total £0.3m (FY16, £13.4m), and in land and buildings total £nil (FY16, £7.0m). No depreciation is charged on these assets.
At 4 March 2017, the Group had not entered into any contractual commitments for the acquisition of property, plant and equipment (FY16, £nil).
Notes to the unaudited condensed consolidated financial statements for the 53
weeks ended 4 March 2017
12. Trade and other receivables
As at 4 March 2017 As at 27 February 2016
£m £m
Amount receivable for the sale of goods and services 599.5 624.7
Allowance for doubtful debts (64.7) (97.6)
534.8 527.1
Other debtors and prepayments 40.6 26.3
575.4 553.4
Trade receivables are measured at amortised cost.
The average credit period given to customers for the sale of goods is 217 days
(FY16, 222 days). Interest is charged at 58.7% (FY16, 58.7%) on the
outstanding balance. Provision for impairment of receivables is established
when there is objective evidence that the Group will be unable to collect all
amounts due. For customers who find themselves in financial difficulties, the
Group may offer revised payment terms to support the customer, encouraging
customer rehabilitation and thereby maximising long term returns. These
revised terms may also include suspension of interest for a period of time.
The cash collection rates on these accounts are therefore reduced and a
provision is held for all receivables on renegotiated terms. Accounts not on
renegotiated terms are also assessed and all accounts that reach the trigger
point of 56 days past due are considered for provision.
The Group considers 56 days past due to be objective evidence of impairment
for all accounts, not on renegotiated terms. All such accounts are subject to
an individual impairment provision. All accounts that are not considered
individually impaired are included in a collective provision to reflect
impairment triggers that are incurred but not reported ("IBNR"). The group
uses historic roll rates to measure the likelihood of receivables moving into
a segment which is subject to individual impairment over a 6 month emergence
period. This is then used to assess the level of provision needed in relation
to these incurred but not reported ("IBNR") events.
Before accepting any new customer, the Group uses an external credit scoring
system to assess the potential customer's credit quality and defines credit
limits by customer. Credit limits and scores attributed to customers are
reviewed every 28 days. The credit quality of trade receivables that are
neither past due nor impaired, with regard to the historical default rate has
remained stable.
As at 4 March 2017 As at 27 February 2016
Ageing of trade receivables Trade receivables Trade receivables on payment arrangements Total trade receivables Trade receivables Trade receivables on payment arrangements Total trade receivables
£m £m £m £m £m £m
Current - not past due 444.2 53.0 497.2 406.6 94.2 500.8
0 - 28 days - past due 38.2 6.5 44.7 41.9 14.0 55.9
29 - 56 days - past due 18.7 2.5 21.2 20.8 5.0 25.8
57 - 84 days - past due 13.3 2.0 15.3 14.4 3.4 17.8
85 - 112 days - past due 9.1 1.6 10.7 10.2 2.6 12.8
Over 112 days - past due 8.1 2.3 10.4 8.5 3.1 11.6
Gross trade receivables 531.6 67.9 599.5 502.4 122.3 624.7
Allowance for doubtful debts (30.8) (33.9) (64.7) (32.4) (65.2) (97.6)
Net trade receivables 500.8 34.0 534.8 470.0 57.1 527.1
The carrying amount of trade receivables whose terms have been renegotiated
but would otherwise be past due totalled £53.0m at 4 March 2017 (FY16,
£94.2m). Interest income recognised on trade receivables which have been
impaired was £40.6m (FY16, £41.7m).
Notes to the unaudited condensed consolidated financial statements for the 53
weeks ended 4 March 2017
12. Trade and other receivables (continued)
Movement in the allowance for doubtful debts As at 4 March 2017 As at 27 February 2016
Balance at the beginning of the period 97.6 100.9
Amounts charged to the income statement 113.5 110.3
Amounts written off (146.4) (113.6)
Balance at the end of the period 64.7 97.6
The amounts written off in the period of £146.4m include the sale of impaired
assets with a net book value of £29m. This sale has also been a material
driver in the reduction in trade receivables on payments arrangements, from
£122.3m to £67.9m as at 4 March 2017.
The concentration of credit risk is limited due to the customer base being
large and unrelated and comprising 1.2 million (FY16, 1.3 million) customers.
Accordingly, the directors believe that there is no further credit provision
required in excess of the allowance for doubtful debts.
'Other debtors and prepayments' includes a net VAT debtor as described in note
8.
Other debtors and prepayments do not include impaired assets. The maximum
exposure to credit risk at the reporting date is the carrying value of each
class of asset. The Group does not hold any collateral over these balances.
13. Provisions
Customer Redress Customer Redress Total
£m £m
Balance as at 27 February 2016 - -
Provisions made during the period 22.9 22.9
Provisions used during the period (3.0) (3.0)
Provision reversed during period - -
Balance at 4 March 2017 19.9 19.9
Non Current 4.3 4.3
Current 15.6 15.6
Balance at 4 March 2017 19.9 19.9
The provisions for customer redress relates to the Group's expected
liabilities in respect of payments for historic financial services customer
redress. The provision made is firstly in respect of recompensing certain
customers due to an error in our previous calculation for redress and,
secondly, our estimate of the likely future costs arising from complaints
relating to financial services products sold in the past.
As at 4 March 2017 the Group holds a provision of £19.9m of which £0.8m is in
respect of administration expenses. There are still a number of uncertainties
as to the eventual customer redress costs, in particular the total number of
claims and the cost per claim, however the Directors believe that the amounts
provided at the period end, based on historical and forecasted claim rates and
amounts, along with known legal and regulatory obligations, appropriately
reflect the expected cost to the Group.
Notes to the unaudited condensed consolidated financial statements for the 53
weeks ended 4 March 2017
13. Provisions (continued)
The principal sensitivities in the customer redress calculation are: customer
claim volume, uphold rates (which reflects the number of customer claims which
result in redress) and average redress amount.
As at 4 March 2017
Customer Redress
£m
+/- 10% in customer claims volumes +/- 0.7
+/- 5% in uphold rate +/- 0.5
+/- 10% in average redress amount +/- 0.7
14. Dividends
The final proposed dividend of 8.56 pence per share, subject to approval by
shareholders, will be paid on 4 August 2017 to shareholders on the register at
the close of business on 6 July 2017.
15. Non-statutory financial statements
The financial information set out in this announcement does not constitute the
company's statutory accounts for the 53 weeks ended 4 March 2017 or the 52
weeks ended 27 February 2016. The financial information for the 52 weeks ended
27 February 2016 is derived from the statutory accounts for 27 February 2016
which have been delivered to the Registrar of Companies. The auditor has
reported on the 27 February 2016 accounts; their report 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 s498(2) or (3) Companies Act 2006. The audit of the
statutory accounts for the 53 weeks ended 4 March 2017 is not yet complete.
The statutory accounts for the 53 weeks ended 4 March 2017 will be finalised
on the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
in due course.
This report was approved by the Board of Directors on 26 April 2017.
This information is provided by RNS
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