REG - Quiz PLC - Interim Results <Origin Href="QuoteRef">QUIZ.L</Origin> - Part 2
22/11/2017 07:12
- Part 2: For the preceding part double click ID:nRSV1650Xa
Net cash generated in operating activities 5,825 1,592 3,242
Cash flow from investing activities
Payments to acquire intangible assets (310) (13) (33)
Payments to acquire property, plant and equipment (2,274) (1,860) (3,537)
Payments to facilitate Group reconstruction (180) - -
Interest received 21 7 7
Net cash used in investing activities (2,743) (1,866) (3,563)
Cash flows from financing activities
Proceeds of new borrowings - 302 591
Repayment of borrowings (1,036) (762) (1,831)
Repayment of finance leases - (1) (1)
Net proceeds from share issue 10,335 - -
Dividends paid - - (14)
Net cash generated/(used) by financing activities 9,299 (461) (1,255)
Net increase/decrease in cash and cash equivalents 12,381 (735) (1,576)
Cash and cash equivalents at beginning of period (484) 1,022 1,022
Effect of foreign exchange rates 10 69 70
Cash and cash equivalents at end of period 14 11,907 356 (484)
1 Basis of Preparation
1.1 Reporting Entity
The Company was incorporated and registered in Jersey on 22 March 2017 as QUIZ
Limited, a private limited company, and on 17 July 2017 was re-registered as a
public limited company. Kast Services Limited became a subsidiary of the
Company with effect from its incorporation on 23 March 2017 and Kast Retail
Ltd, Tarak International Limited and Shoar (Holdings) Limited became
subsidiaries of the Company following the completion of share exchange
agreements on 5 April 2017. The Company is now the parent holding company of
the Subsidiaries (together the "Group").
The interim financial statements have been prepared by the directors of the
Company (the "Directors") on a going concern basis and under the historical
cost convention and is presented in pounds' sterling (£) being the functional
currency of the Subsidiaries.
The registered office of the Subsidiaries is 61 Hydepark Street, Glasgow, G3
8BQ. The principal activity of the Subsidiaries is the retail of ladies
fashion clothing, footwear and accessories.
1.2 Basis of Preparation
These interim financial statements have been prepared in accordance with "IAS
34 Interim Financial Reporting" as adopted by the EU and the requirements of
the Disclosures and Transparency Rules. They do not include all of the
information required for full annual financial statements and do not
constitute statutory accounts within the meaning of section 435 of the
Companies Act 2006.
1.3 Pro-forma Comparatives
Given the Company formed on 23 March 2017 and acquired its subsidiaries on 23
March and 5 April 2017 there are no statutory comparative figures and
statutory trading figures for the year ended 31 March 2017.
The interim financial statements consolidate Kast Services Limited which
became a subsidiary on 23 March 2017 and those companies that became
subsidiaries on 5 April 2017; Kast Retail Limited (and its subsidiary, Kast
Franchise Spain SL), Tarak International Limited, Shoar (Holdings) Limited
(and its subsidiary, Tarak Retail Limited). All intercompany transactions and
balances between Group companies are eliminated.
Prior to becoming subsidiaries of the Company, each company in the Group
operated under the QUIZ brand and was closely controlled by a common
management team and shareholders. Management decisions were taken in
consideration of the development of all the companies operating in concert
throughout all the preceding periods.
The Directors have considered the accounting policy that should be applied in
respect of the consolidation of the Group formed in anticipation of Admission
to AIM. They have concluded the transactions described above represented a
combination of entities under common control and in accordance with IAS 8
'Accounting policies, changes in accounting estimates and errors' have
considered FRS 102 Section 19, which the directors believe reflects the
economic substance of the transaction. Under this standard, assets and
liabilities are recorded at book value, not fair value, intangible assets and
contingent liabilities are recognised only to the extent that they were
recognised by the legal acquirer, no goodwill is recognised and comparative
amounts, if applicable, are restated as if the combination had taken place at
the beginning of the earliest accounting period presented. Therefore, although
the group reconstruction did not take place until 5 April 2017, these interim
financial statements are presented as if the group structure had always been
in place, using merger accounting policies.
Statutory accounts for the companies aggregated in the financial statements
for the year ended 31 March 2017 have been delivered to the Registrar of
Companies. The auditor's report on those accounts were unmodified, did not
draw attention to any matters by way of emphasis and did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006.
1.4 Significant Accounting Policies
The interim financial statements have been prepared in accordance with
accounting policies that are consistent with those applied in the preparation
of the Historical Financial Information to 31 March 2017 presented on pages 58
to 64 in the Admission Document for the Placing and Admission to AIM by the
Company, which is available on www.quizgroup.co.uk and that are expected to be
applied in the Report and Accounts of the year ended 31 March 2018. The
following new or revised standards or interpretations apply to accounting
periods beginning after 31 March 2017:
New or Revised Standards or Interpretation Effective for Accounting Periods Commencing on or After
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017
Amendments to IAS 7: Disclosure initiative 1 January 2017
IFRS 15 Revenue from Contracts with Customers 1 January 2018
Clarifications to IFRS 15 Revenue from Contracts with Customers 1 January 2018
IFRS 9 Financial Instruments 1 January 2018
Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018
IFRS 16 Leases 1 January 2019
Management are currently assessing the impact IFRS 16 Leases will have on the
recognition of assets and related liabilities and the associated lease costs.
Management do not consider that the other new or revised standards or
interpretations will have a material effect on the interim statements for the
period ended 30 September 2017.
1.5 Going concern
The directors have prepared trading and cash flow forecasts for a period of
one year from the date of approval of these interim financial statements. The
directors have a reasonable expectation that the Group has adequate cash
headroom. Accordingly, they continue to adopt a going concern basis in
preparing the financial statements of the Group.
2. Principal risks and uncertainties
The board considers the principal risks and uncertainties which could impact
the group over the remaining six months of the financial year to 31 March 2018
to be unchanged from those set out on pages 40 to 51 of the Admission Document
for the Placing and Admission to AIM by the Company, which is available on
www.quizgroup.co.uk.
In summary these are: competition risk; fashion and customer demands risk;
supply chain risk; the dependence on third party partners, the risk of
disruption to IT systems or distribution networks; people risk and the
protection of brand image and reputation.
3. Revenue
An analysis of revenue by geographical destination is as follows:
Unaudited six months ended 30 September 2017 Unaudited six months ended 30 September 2016 Unaudited year ended 31 March 2017
£000 £000 £000
United Kingdom 44,984 32,063 68,063
Overseas 11,163 9,457 21,704
56,147 41,520 89,767
4. Non-recurring administrative costs
Non-recurring administrative costs in the six months ended 30 September 2017
of £1.0m related to Placing and Admission to AIM by the Company and the Group
reorganisation undertaken in preparation of this process.
There were no non-recurring costs in the year ended 31 March 2017.
5. Expenses by nature
Unaudited six months ended 30 September 2017 Unaudited six months ended 30 September 2016 Unaudited year ended 31 March 2017
£000 £000 £000
Employment costs 9,449 7,635 15,601
Depreciation 1,296 944 2,046
Amortisation 42 39 78
Operating lease payments 2,923 2,656 5,346
Non-recurring administrative costs 1,002 -
Share based payment charges 150 - -
Other expense 6,947 5,041 11,456
Administrative costs 21,809 16,315 34,527
6. Income Tax Expense
The Group's full year forecast effective tax rate in respect of continuing
operations for the six months ended 30 September 2017 is 20.6% (six months
ended 30 September 2016 and year ended 31 March 2017: 18.4%). This effective
tax rate is higher than the UK corporation tax rate for H1 2018 of 19.0% due
to permanent differences arising from costs incurred with the Placing and
Admission to AIM by the Company.
7. Dividends
No dividend is payable for H1 2018 (six months ended 30 September 2016 - £Nil,
year ended 31 March 2017 - £14,000).
8. Earnings per share
Unaudited six months ended 30 September 2017 Unaudited six months ended 30 September 2016 Unaudited year ended 31 March 2017
£000 £000 £000
Number of shares: No. No. No.
Weighted number of ordinary shares outstanding 124,230,905 124,230,905 124,230,905
Effect of dilutive options 200,179 200,179 200,179
Weighted number of ordinary shares outstanding- diluted 124,431,084 124,431,084 124,431,084
Earnings: £000 £000 £000
Profit for H1 2018 - basic and diluted 2,921 3,006 6,617
Profit for H1 2018 - adjusted 4,073 3,006 6,617
Earnings per share: Pence Pence Pence
Basic earnings per share 2.35 2.42 5.33
Adjusted earnings per share 3.28 2.42 5.33
Diluted earnings per share 2.35 2.42 5.32
Adjusted diluted earnings per share 3.27 2.42 5.32
The adjusted profit after tax for H1 2018 and adjusted earnings per share are
shown before non-recurring costs (net of tax) of £1.0m (six months ended 30
September 2016 and year ended 31 March 2017: £Nil) and share based payment
charges of £0.1m (six months ended 30 September 2016 and year ended 31 March
2017: £Nil). The directors believe that the adjusted profit after tax and the
adjusted earnings per share measures provide additional useful information for
shareholders on the underlying performance of the business. These measures are
consistent with how underlying business performance is measured internally.
The adjusted profit after tax measure is not a recognised profit measure under
IFRS and may not be directly comparable with adjusted profit measures used by
other companies.
9. Property, Plant and Equipment and Intangibles
During H1 2018 the Group made additions of £2.6m (H1 2017 £1.9m) and disposals
of £Nil (H1 2017 £Nil).
10. Trade and other receivables
Unaudited as at 30 September 2017 Unaudited as at 30 September 2016 Unaudited as at 31 March 2017
£000 £000 £000
Trade receivables 6,172 5,022 6,531
Other receivables 615 457 590
Prepayments and accrued income 3,518 2,853 2,330
Amounts owed by related parties 26 1,199 1,282
10,331 9,531 10,733
11. Trade and other payables
Unaudited as at 30 September 2017 Unaudited as at 30 September 2016 Unaudited as at 31 March 2017
£000 £000 £000
Trade payables 5,324 5,380 5,585
Corporation tax 2,154 1,598 1,426
Other taxes and social security costs 1,213 900 502
Accruals 5,003 3,804 3,139
Deferred income 214 278 177
Other creditors 254 214 294
Amounts due to related parties 45 - 50
14,207 12,174 11,173
12. Financial Instruments
The following table shows the carrying amounts and fair values of financial
assets and liabilities. All financial liabilities are measured at amortised
cost.
Unaudited as at 30 September 2017 Unaudited as at 30 September 2016 Unaudited as at 31 March 2017
£000 £000 £000
Category of Financial Instruments
Carrying value of financial assets:
Cash and cash equivalents 11,907 3,047 2,059
Trade and other receivables 6,813 6,678 8,403
Total financial assets 18,720 9,995 10,462
Carrying value of financial liabilities:
Trade and other payable (10,626) (9,398) (9,068)
Bank and other borrowings (489) (4,995) (4,067)
Total financial liabilities (11,115) (14,393) (13,135)
The cash and cash equivalents are held with bank and financial institution
counterparties, which are rated P-1 and A-1, based on Moody's ratings.
13. Share Capital
On 28 July 2017 the Company was admitted to trading on AIM. On this date the
Company issued 6,583,851 ordinary shares of 0.3 pence each with a nominal
value of £19,752 at 161 pence per share giving rise to share premium of
£10,580,248.
Prior to this date the Company had issued 117,647,054 with a nominal value of
£352,941 in relation to the incorporation of the Company and the purchase of
its subsidiaries; Kast Retail Limited, Tarak International Limited and Shoar
(Holdings) Limited.
As a result of these transactions the issued share capital at 30 September
2017 comprised 124,230,905 ordinary shares of 0.3 pence each with a nominal
value of £372,693 which gave rise to share premium of £10.3m (net of
expenses).
14. Cash and cash equivalents
Unaudited as at 30 September 2017 Unaudited as at 30 September 2016 Unaudited as at 31 March 2017
£000 £000 £000
Cash 11,907 3,047 2,059
Bank overdraft - (2,691) (2,543)
Balance at end of the period 11,907 356 (484)
15. Related party transactions
The Group considers its Executive and Non-Executive Directors as key
management and therefore has a related party relationship with them.
Two directors, Tarak Ramzan and his son Sheraz Ramzan, and their relatives
control 48.7% of the voting shares of the Company.
The Group transacts with the companies which Tarak and Sheraz Ramzan have an
interest. The amounts of the transactions and balances due to and from the
related parties during the year and at the year-end are:
Sales to Purchased from
Unaudited six months ended 30 September 2017 Unaudited six months ended 30 September 2016 Unaudited year ended 31 March 2017 Unaudited six months ended 30 September 2017 Unaudited six months ended 30 September 2016 Unaudited year ended 31 March 2017
£000 £000 £000 £000 £000 £000
Tarak Manufacturing Limited - - - 79 70 112
Big Blue Concepts Limited - - - 72 60 120
Balance owed to Balance due from
Unaudited as at 30 September 2017 Unaudited as at 30 September 2016 Unaudited as at 31 March 2017 Unaudited as at 30 September 2017 Unaudited as at 30 September 2016 Unaudited as at 31 March 2017
£000 £000 £000 £000 £000 £000
Tarak Manufacturing Limited 45 - 54 26 60 143
Koast Investments Limited - - - - 774 774
Big Blue Concepts Limited - - - - 364 364
This information is provided by RNS
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