REG - Quiz PLC - Final Results
05/07/2023 07:00
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RNS Number : 9741E Quiz PLC 05 July 2023
5 July 2023
QUIZ plc
("QUIZ" or the "Group")
Final Results for the year ended 31 March 2023
Continued revenue recovery and improved profitability in FY23
QUIZ, the omni-channel fashion brand, announces its final audited results for
the year ended 31 March 2023 ("FY 2023").
Financial highlights:
The income statement set out below is included to show the underlying
performance of the Group:
Year ended 31 March 2023 Year ended 31 March 2022 Change £m Change %
£m
Revenue 91.7 78.4 +13.3 +17.0%
Gross profit 56.5 47.3 +9.2 +19.5%
Operating expenses (54.2) (47.4) -6.8 +14.5%
Government grants - 1.0 -1.0 -100.0%
Other income 0.2 - +0.2 -
Operating profit 2.5 0.9 +1.6 +169.9%
Finance costs (net) (0.2) (0.1) -0.1 +103.3%
Profit before tax 2.3 0.8 +1.5 +191.5%
EBITDA 6.2 5.1 +1.1 +20.8%
· Group revenue increased 17% year on year supported by the
cessation of all social restrictions leading to increased demand.
· Higher levels of full price sales resulted in gross margin
increasing to 61.6% (2022: 60.3%), which was above the level achieved prior to
the pandemic
· Efficient cost control with the proportionate rise in
operating costs (distribution and administrative costs) being below the
increase in revenues despite the significant inflationary pressures
experienced during the year
· EBITDA increased 21% to £6.2 million (2022: £5.1 million)
· Profit before tax increased 192% to £2.3 million (2022:
£0.8 million)
· Operating cash inflows of £5.9 million (2022: inflow of
£5.3 million)
· Total liquidity headroom at 31 March 2023 of £8.3 million,
being a cash balance of £7.6 million and £2.1 million of unutilised bank
facilities less £1.4 million of bank loans (31 March 2022: £6.5 million,
being cash of £5.8 million and £2.1 million of unutilised bank facilities
less £1.4 million of bank loans)
Operational highlights:
· Continued online growth with a 13% increase in sales through
QUIZ's own website
· Active customers(1) increased 11% on the prior financial year
in line with demand for QUIZ's core occasion wear offering
· The benefits of previous store restructuring reflected in a
positive contribution from stores
· Continued growth in International revenues with a 10%
increase year on year
· QUIZ's store estate comprised 62 stores in the United Kingdom
and six in the Republic of Ireland at the end of the year (2022: 62 in the UK
and 5 in the ROI)
Post year end and Outlook:
· The Group generated revenue of £23.2 million in the three
months to 30 June 2023, representing a 15% decrease on the prior year in part
reflecting the strong prior year comparatives in the first half as well as the
impact of the macroeconomic uncertainty and inflationary pressures on consumer
demand.
· Revenues in the first three months of the current financial
year have been broadly consistent on a like-for-like basis with those
generated in the comparable period in FY 2019, that being the last period
unaffected by coronavirus related factors.
· Continued focus on growing of revenues from our own stores
and website with three new stores opening in the United Kingdom post year end
· Bank facilities extended to 30 June 2024 and increased from
£3.5 million to £4.0 million
· Total liquidity headroom at 4 July 2023 of £7.1 million,
being a cash balance of £3.7 million and £3.7 million of undrawn banking
facilities less £0.3 million of bank loans
· During H2 the trading environment is expected to remain
challenging, albeit the Group has softer comparatives in the second half of
the financial year. Reflecting the uncertainty with regards to consumer demand
and inflationary cost pressures, the Board currently anticipates that profit
before tax for current year will be similar that generated in the past year.
· Longer term the Board remains confident the Group will
deliver sustainable and profitable growth
1. An active customer is a customer registered on our database who has
transacted in the last twelve months.
Tarak Ramzan, Founder and Chief Executive Officer, commented:
"Our FY 2023 results reflected a strong recovery in consumer demand for QUIZ's
occasion-wear-led product offering, resulting in positive sales and profit
growth. The past year once again demonstrated the benefits of the Group's
omni-channel model as we saw encouraging revenue growth across stores and
online.
We continue to firmly believe that the QUIZ brand has a clear, differentiated
position in the market and continues to resonate with a broad age range of
customers. The Group continues to focus on achieving its online growth
potential through its website and we were encouraged by the increase in sales
and active customers during the year.
The trading environment in the opening months of the new financial year has
been tough reflecting the widely publicised external economic factors
impacting consumer demand. Whilst this challenging backdrop is expected to
continue into the second half, the Board remains confident that the Group's
omni-channel business model and differentiated brand will enable the Group's
long-term success and profitable growth."
Enquiries:
QUIZ plc Via Hudson Sandler
Tarak Ramzan, Chief Executive Officer
Gerry Sweeney, Chief Financial Officer
Sheraz Ramzan, Chief Commercial Officer
Panmure Gordon +44 (0) 207 886 2500
(Nominated Adviser and Broker)
Emma Earl
Rupert Dearden
Hudson Sandler LLP (Public Relations) +44 (0) 207 796 4133
Alex Brennan / Ben Wilson quiz@hudsonsandler.com (mailto:quiz@hudsonsandler.com)
Notes:
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").
About QUIZ:
QUIZ is an omni-channel fashion brand, specialising in occasion wear and
dressy casual wear. QUIZ delivers a distinct proposition that empowers its
fashion forward customers to stand out from the crowd.
QUIZ's buying and design teams constantly develop its own product lines,
ensuring the latest glamorous looks at value prices. This flexible supply
chain, together with the winning formula of style, quality, value and
speed-to-market has enabled QUIZ to grow rapidly into an international brand
with stores, concessions, franchise stores, wholesale partners and
international online partners
QUIZ operates through an omni-channel business model, which encompasses online
sales, standalone stores, concessions, international franchises and wholesale
arrangements.
To download images please visit:
http://www.quizgroup.co.uk/media-download-centre/
(http://www.quizgroup.co.uk/media-download-centre/)
For further information:
https://www.quizclothing.co.uk/ (https://www.quizclothing.co.uk/)
http://www.quizgroup.co.uk/ (http://www.quizgroup.co.uk/)
CHAIRMAN'S STATEMENT
Introduction
The Group's financial statements for the year ended 31 March 2023 show an
uplift in revenues reflecting increased consumer demand following the
cessation of COVID-19 related lockdowns and social restrictions. As a result
of the increased revenues as well as improved gross margins and continued
tight cost control, we are pleased to report an uplift in profitability.
Our trademark occasion and dressy wear for social events and activities has
always been at the centre of the QUIZ brand. QUIZ has traditionally provided
options for a variety of social occasions such as attending lunch with
friends, a day at the races, a Christmas party or a wedding. The return of
these and other activities in the year has led the notable positive impact on
customer demand.
The positive performance in the year was driven by strong growth recorded
across each of the Group's key channels of both owned and third-party retail
and online operations, reinforcing the benefits of QUIZ's omni-channel model.
Our store portfolio performed well during the Period, generating a positive
financial contribution. This reflects the favourable lease arrangements and
well-located nature of our store estate as well as customers' desire to
interact directly with the brand whether that be through purchasing in-store,
utilising our click and collect in store service, ordering in-store, or
exchanging/returning to store.
I would like to take this opportunity to thank the Group's management team and
all colleagues across the business for their continued commitment and hard
work that contributed to the improved financial performance in the current
year.
FY2023 performance overview
The removal of all social restrictions led to increased demand and strong
like-for like sales in the first half of the year. Demand moderated in the
second half of the year as the cost-of-living pressures progressively impacted
consumer spend and, as a result, sales were broadly in line with their
pre-pandemic levels on a like-for-like basis. Across the year to 31 March
2023 there was a 17% increase in the Group's revenues to £91.7million (2022:
£78.4 million).
As demand increased and revenues improved, so did the proportion of full price
sales. This is reflected in the 130bps improvement in the gross margin
generated compared to the same period in the previous year.
Management retained close control on operating costs with the proportionate
increase in costs being less than the rise in revenues in the year despite the
significant inflationary pressures.
Across our store estate the majority of lease arrangements provide increased
flexibility with charges predominantly linked to revenues generated. During
the year the business secured a number of longer lease arrangements for stores
to secure the positive contribution being generated. As a result, the stores
currently have an average lease term of 23 months, up from 15 months in the
previous year.
During the year the number of concessions operated by the Group was broadly
maintained and there were a number of changes made to the arrangements with
third party websites to increase the proportion of sales despatched directly
by QUIZ. As a result, the Group's performance benefited from a higher
proportion of revenues generated from its own stores and website which
typically generate a higher contribution than other revenue streams.
Further to the above, operating profit before financing and taxation was £2.5
million (2022: £0.9 million). EBITDA was £6.2 million (2022: £5.1million).
Profit before tax amounted to £2.3 million (2022: £0.8 million).
The Financial Review section provides more detail on the Group's financial
performance during the year.
Cash position
The Group remains focussed on its cash balance and ensuring that the business
has the necessary resources to grow and minimise the impact of any disruption
arising from reduced consumer demand. Increasing our cash balance provides
greater financial stability and helps ensure that the business can continue to
capitalise on demand for its product.
We were pleased to generate a cash inflow of £5.9 million from operating
activities in the year (2022: inflow of £5.3 million). After a £2.5
million outflow acquiring intangible assets and property, plant and equipment
(2022: £0.5 million) total liquidity headroom improved by £1.8 million. As
at 31 March 2023, the Group had £8.3 million of total liquidity headroom,
being a cash balance of £7.6 million and £2.1 million of undrawn bank
facilities less £1.4 million of bank loans(31 March 2022: £6.5 million of
total liquidity headroom).
On 4 July 2023 the total liquidity headroom available was £7.1 million, being
a £3.7 million cash balance and £3.7 million of undrawn bank facilities less
£0.3 million of bank loans. The cash utilisation since 31 March partially
reflects investment in three new stores and the commencement of works to
expand our distribution centre.
The bank facilities available to the Group were recently renewed and were
increased from £3.5 million to £4.0 million. These facilities will expire
on 30 June 2024. There are no financial covenants applicable to these
facilities.
This will support the business's initiatives to further diversify the product
range and ensure the Group is well positioned to respond to the continued
increase in demand for its core occasion wear offering in due course.
Operating an ethical supply chain
The Board continues to prioritise ensuring that the Group has an ethical and
responsible supply chain that all QUIZ's stakeholders are proud of. The Group
is committed to continuing to invest in this critical area of the business to
ensure that the Group's systems remain robust and that the Group's strict
Ethical Code of Practice is always adhered to by all QUIZ suppliers.
There is an ongoing programme in place to ensure that all our products are
supplied in line with our Ethical Code of Practice. Regular supplier visits
continue to be conducted and processes are in place to allow for clear
visibility across the Group's supply chain. The Board remains resolutely
committed to ensuring the Group's systems, processes and culture are fit for
purpose to assure compliance in this area.
Dividends
The Board does not recommend the payment of a final dividend (2022: £Nil).
The business will remain focused on delivering a sustainable profitable
performance, subject to which the Board would anticipate reinstating dividend
payments.
Outlook and current trading
Consistent with many other fashion and clothing retailers, year-on-year growth
has moderated this calendar year as inflationary pressures continue to impact
consumer confidence. As a result of these external headwinds as well as the
strong prior year comparatives which benefited from increased demand as social
restrictions ceased, like-for-like revenues in recent months have been lower
than the previous year.
However, despite the challenging trading conditions in recent months, Group
revenues in the first three months of FY24 have been broadly consistent on a
like-for-like basis with those generated in the comparable period in the year
ended 31 March 2019, that being the last period unaffected by coronavirus
related factors.
The Group has generated sales of £23.2 million in the three months to 30 June
2023, broken down across the Group's channels as follows:
I April to 30 June 2023 I April to 30 June 2022 Year-on-year change
Online £7.6m £9.5m - 20.0%
UK stores and concessions £11.0m £13.0m - 15.4%
International £4.6m £4.8m - 4.2%
Total £23.2m £27.3m - 15.1%
Gross margins are in line with expectations and are broadly consistent with
the previous year.
The business continues to actively manage the increased cost pressures
affecting the wider retail sector, but we would expect an increase in
operating costs particularly in relation to payroll costs and utility costs
further to the expiry of the previous price arrangements which were
established two years ago.
Given the uncertainty with regards to consumer demand and the inflationary
cost pressures the Board anticipates that profit before tax for the current
financial year will be broadly similar to that generated in FY23.
Despite the near-term economic challenges the Board is confident that the
Group's omni-channel business model can deliver long-term success underpinned
by a clear focus on the development of revenues from our own stores and
website. We are encouraged by the continued demand for the Group's product
proposition and the revenue growth increased profitability achieved in the
previous year, and we remain confident in the Group's future success.
Peter Cowgill
Non-Executive Chairman
CHIEF EXECUTIVE'S REPORT
Introduction
QUIZ's FY 2023 financial year reflected a strong recovery in demand further to
the cessation of all COVID-19 related social restrictions. Across the year
sales grew positively on a like-for-like basis.
The past year illustrated the benefits of QUIZ's omni-channel model which
provides customers with the opportunity to engage with the QUIZ brand across
different channels. As a result, we generated revenue growth in each channel
during the year as follows:
FY 2023 FY 2022 Year-on-year change Share of revenue 2023 Share of revenue 2022
Online £29.8m £26.7m + 12% 32.5% 34.1%
International £16.4m £14.9m + 10% 17.9% 19.0%
UK stores and concessions £45.5m £36.8m + 24% 49.6% 46.9%
Total £91.7m £78.4m + 17%
The Group's long-term strategy remains focussed on the development of the QUIZ
brand through its omni-channel distribution model and to adapt and improve to
ensure the brand continues to succeed. The Group continues to focus on
achieving its online growth potential through its own website, which has
historically generated a higher contribution than revenues from third party
websites, supported by a profitable store and concession portfolio.
We continue to firmly believe that the QUIZ brand has a clear, differentiated
position in the market as an occasion wear led brand and continues to resonate
with a broad age range of customers. This belief is supported by the increased
demand for our products across the year.
Optimising the omni-channel model in the UK
QUIZ's online channel provides the potential for significant long-term growth.
The business has benefited from the return to social activities and the
corresponding increase in customer demand for occasion wear has increased the
profitability of sales through the higher revenues and margins generated in
the year.
Given the long-term trends towards increased online shopping, we continue to
believe that QUIZ's online channel offers significant long-term profitable
growth potential for the Group. In FY 2023, given the stronger growth
experienced across the stores and concession revenues in the year, online
sales represented 33% of QUIZ's Group revenue (2022: 34%).
Going forward, the focus will be to ensure the business continues to benefit
from offering on trend product for social activities ranging from lunch with
friends through to attending weddings. The business continues to benefit
from altering its product offering dependent upon the occasion, whether that
be attending a race day, going on holiday or preparing for the Christmas party
season.
The Group has continued to develop its store estate opening new stores in
Bracknell and Brighton and relocating stores in Aberdeen and Lakeside. In
addition, two stores closed during the year therefore the number of stores
operated at the end of the year remained at 62.
Three new stores opened subsequent to the year end in Southampton, Plymouth
and Fareham. In addition, we have commenced work on relocating our Braehead
store and anticipate reopening a store in Liverpool later in the year. We
will continue to open new stores where appropriate flexible lease arrangements
can be secured.
Concessions provide a flexible model to ensure that they are making a positive
contribution. During the year, 15 concessions were closed and 13 opened
resulting in a reduction in the number operating at 31 March 2023 to 67.
The Group believes that stores and concessions with appropriate cost bases
will continue to make a positive contribution going forward and is encouraged
by the improvement in returns generated from stores across the year. We will
continue to undertake initiatives to promote footfall into stores including
trialling the introduction of new product categories in store, utilising our
store network for online collections and returns, and improving stock
availability across the estate.
Selective international growth potential through capital light model
We continue to receive positive customer reactions to the QUIZ brand
internationally. Our mix of casual and occasion wear can be tailored for each
market and our flexible routes to market has been beneficial.
International customers also experienced increased demand further to the
cessation of lockdowns and the relaxation of social restrictions. Given
this, international revenues as a share of Group revenues remained broadly
consistent year on year at 18% (2022: 19%). We continue to identify
opportunities to extend our sales through low-risk, low-cost international
expansion driven by our capital-light online, consignment and concession
routes to market.
Managing gross margin
During the current year, gross margins improved to levels in excess of those
generated prior to the pandemic. The increased demand for newer, full price
products experienced during the year and the greater proportion of sales
through the higher margin store and concession channel resulted in the gross
margin increasing to 61.6% (2022: 60.3%).
During the year we encountered increased cost pressures in relation to product
and shipping costs. We have successfully adjusted prices to maintain our gross
margin whilst broadening the range of prices offered to customers so they have
a wide range of options suitable for their budgets.
Leveraging our cost base
We continue to carefully manage costs and will look to leverage off the
Group's existing infrastructure as revenues grow. The last year has proven
challenging given the inflationary cost pressures impacting across the
business with increased employee costs, utility costs, and the removal of all
reliefs associated with business rates.
Given this we were pleased that the increase in operating costs was restricted
to 15% which was below the 17% increase in revenues.
We will continue to review our cost base to ensure it is appropriate for the
revenues that will be generated going forward.
A strong brand
QUIZ is a distinctive fashion brand which, over many years, has developed a
specialisation in occasion wear and dressy casual wear for women. QUIZ's core
business continues to deliver a distinct proposition that empowers
fashion-forward females to stand out from the crowd.
We firmly believe that the QUIZ brand has a clear, differentiated position in
the market with a specialisation in occasion wear and dressy casual wear for
women, and the brand continues to resonate with a broad age range of
customers. This belief was supported by the increased demand for our products
over the year as restrictions on social events were eased.
The number of online active customers increased during the year, reflecting
the recovery in online revenues and the appeal of the QUIZ brand. The number
of active customers, increased by 11% to 622,000 (2022: 563,000) which is
approaching the levels achieved prior to the pandemic.
During the period, the brand maintained its social media engagement relative
to the prior year, with increases in our Instagram and Facebook audiences
respectively and growth in our engagement on Tik Tok.
Our flexible supply chain remains a key competitive advantage
The business has a well invested infrastructure and a proven successful supply
chain which allows us to source clothes in a responsible and ethical manner.
This allows for the business to respond to customer demands and to provide
on-trend product whether it be influenced by social media, the catwalk or
television.
During the year we finalised plans to expand capacity at our Distribution
Centre. This work commenced subsequent to the year end and will provide a
new mezzanine level to increase storage space and provide an improved layout
to accommodate more efficient working practices. The work will conclude in
the Autumn and will cost £1.3 million.
We continue to work to broaden our supply base and reduce any dependency on
any one particular supplier or region. Our supply chain and ability to
constantly refresh products for sale in store and online are strong
competitive advantages.
QUIZ continues to introduce new products each week in order to meet customer
demand as trends emerge throughout the season. The Board believes this remains
an important component for success as customers increasingly access the
options available of where, when and how to shop.
QUIZ's sustainable collection
In the last year we introduced the QUIZ Eco collection, which was our first
step to creating an environmentally friendly collection. The capsule
collection was designed and manufactured in the UK via the Global Recycled
Standard certified route.
Going forward we will focus on using more sustainable materials across our
ranges to help minimise our environmental impact.
Targeted marketing investment
Underpinning the growth and expansion of the QUIZ brand is the Group's
approach to targeted and returns-driven marketing investment. Our marketing
activity utilised a pipeline of celebrity and influencer activity across the
year. These activities continued to be supplemented with digital marketing and
offline activity to push the QUIZ brand to the forefront of our target
customers' minds.
Investment continued to be carefully managed during the year given the Group's
focus on cost management. Marketing spend increased 17% to £2.7 million
(2022: £2.3million) in line with the increase in revenues and, as a result,
marketing investment as a proportion of Group sales for FY 2022 was maintained
at 3.0% (2022: 3.0%).
We are pleased to see a positive response to our ongoing social media
activity. This activity continues to be supplemented with digital marketing
and offline activity to ensure that QUIZ remains at the forefront of our
customers' minds.
The QUIZ community
Our business has progressed well in the last year; growing revenues and
profitability whilst investing to facilitate further growth. The resilience
of the business is a reflection of the commitment and professionalism shown by
our colleagues across our stores and concessions, distribution centre and head
office through these difficult times. I would like to thank all my colleagues
for their hard work and contribution in the last year and we can look forward
to achieving further profitable growth going forward.
I would also like to thank our suppliers, business partners and customers for
their continued support, allowing the business and brand to approach the
future with confidence.
Tarak Ramzan
Chief Executive Officer
FINANCIAL AND BUSINESS REVIEW
Group overview
The business benefited from the complete removal of lockdowns and social
restrictions related to COVID-19 in early 2022. This supported an uplift in
revenues across each area of our business during the year and a higher level
of profitability which contributed to a strengthening of the Group's financial
position.
Group revenue increased 17% to £91.7 million (2022: £78.4 million).
Further to this increase in revenues, operating profit generated was £2.5
million (2022: £0.9 million).
Financial KPIs
FY 2023 FY 2022 Change
Revenue £91.7m £78.4m + 17.0%
Gross margin 61.6% 60.3% + 1.3%
Adjusted EBITDA % 6.8% 6.6% + 0.2%
Cash from operating activities £5.9m £5.3m + £0.6m
EBITDA increased to a profit of £6.2 million (2022: £5.1 million) which
represented an EBITDA margin of 6.8% (2022: 6.6%). Group profit before tax was
£2.3 million (2022: £0.8 million). Earnings per share was 1.64 pence (2022:
1.65 pence).
Cash net of bank borrowings at the year end amounted to £6.2 million (2022:
£4.4 million).
Revenue
Group revenue increased by 17% to £91.7 million from £78.4 million in 2022,
with our three revenue channels shown below:
FY 2023 FY 2022 Year-on-year growth Share of revenue 2023 Share of revenue 2022
Online £29.8m £26.7m + 12% 32.5% 34.1%
International £16.4m £14.9m + 10% 17.9% 19.0%
UK stores and concessions £45.5m £36.8m + 24% 49.6% 46.9%
Total £91.7m £78.4m + 17%
Online
The increase in Online revenues reflects the increased demand for product
experienced across the business.
Revenues from QUIZ's own website grew 13% and contributed 70% of total online
sales (2022: 69%). Sales through third-party websites increased 9% in the
year. Most of the sales through third party websites are now despatched from
QUIZ's facilities which allows for a reduction in the stock being held by
third-parties, provides improved service for customers and helps maximise the
financial returns generated.
The impact of the stronger demand during the year was reflected in the number
of active customers at 31 March 2023 which increased 11% in the year to
622,000 (2022: 563,000).
International
International sales include revenue from QUIZ standalone stores and
concessions in the Republic of Ireland and franchises in 19 countries.
As with the UK sales, International revenues benefited from increased demand
once pandemic related restrictions were lifted leading to a 10% rise to £16.4
million (2022: £14.9 million).
Revenues in Ireland increased 48% in the year to £6.4 million (2022: £4.3
million) further to the cessation of lockdown periods which restricted
trading. At 31 March 2023 the business operated six stores and 18
concessions in Ireland (March 2022 - five stores and 18 concessions),
Sales with our main franchise partners also benefited from the return to
previous demand levels. Further to ceasing arrangement with a number of
smaller customers, revenues decreased 6% to £10.0 million (2022: £10.6
million).
UK stores and concessions
Sales in the Group's UK standalone stores and concessions increased 24% to
£45.5 million (2022: £36.8 million). The increase was largely
attributable to a strong performance across our store estate.
As at 31 March 2023, the Group operated from 62 stores and 67 concessions
(2022: 62 stores and 69 concessions). During the year, two stores opened,
two closed and two were relocated. There were a number of changes in the
concessions operated with 13 opening and 15 closing in the year.
As a result of these changes, total selling space across the stores and
concessions at 31 March 2023 increased by 7% to 145,000 sq. ft. (2022: 136,000
sq. ft.).
Gross margin
Gross margins in the year progressively improved and achieved levels in excess
of those generated prior to the pandemic. In the current year, customers
have continued to express their preference for new products. In addition, a
higher proportion of sales were generated through stores and concessions which
are traditionally higher margin channels.
Promotional activity which is undertaken on a targeted basis increased later
in the year as consumer demand slowed.
Further to the factors, the gross margin in the year increased to 61.6% (2022:
60.3%).
Progress was made in disposing of excess stock from previous lockdown periods
and this contributed to a £0.9 million reduction in the provision against
slow-moving stock in the year to £1.7 million (2022: £2.6 million). The
Group remains focussed upon ensuring that forward commitments on stock are
managed to allow the business to be responsive to changes in customer demand
and that any slow moving stock is discounted at an early stage to help improve
the turnover of stock.
During the year we continued to encounter increased product cost and the costs
associated with their shipment cost pressures. Whilst we have marginally
increased prices to maintain our gross margin, we have ensured a range of
price points is available to customers to meet their price expectations.
The previously reported industry-wide global freight disruption and increased
costs abated in the second half of the year. This has allowed for more
product to shipped by air freight allowing the product offering to be more
responsive to trends and consumer preferences.
Operating costs
Further to the Group's increased revenues and operational activities there
have been increases in operating costs, namely administrative and distribution
costs, in the year. Operating costs increased by 15% from £47.4 million to
£54.3million.
The increases in costs reflect the impact of higher revenues on variable
costs, including turnover rents, merchant fees, certain distribution costs,
utilities, travel and expenses.
Administrative costs increased by £5.1 million or 14% to £41.7 million
(2022: £36.6 million). The most significant increases included:
• A £2.8 million or a 42% rise in property costs to
£9.5million (2022: £6.7 million) which includes depreciation charges in
relation to leases for standalone stores. The increase is primarily due to a
£2.5 million increase in business rates for retail businesses further to the
removal of any COVID related relief on the amount charged;
• A £1.4 million increase in employee costs reflecting
increases in the amount paid as well as higher employee numbers year-on-year;
and
• A £0.4 million or a 17% increase in marketing costs to
£2.7 million. Spend continued to be focused on digital marketing where a
clear Return on Investment can be demonstrated and spend to drive broader
awareness of the QUIZ brand and to ensure the business benefited from the
increased consumer demand for occasion and dressy wear.
The above increases were partially offset by a £0.5 million or 21% decrease
in depreciation and amortisation costs (excluding depreciation charges in
relation to leases for standalone stores which are reflected in property
costs) to £1.8 million (2022: £2.3 million) which reflect the previous asset
impairments and therefore reduced depreciation charges recorded in the current
year.
In the current year there continues to be pressure on payroll costs further to
the increase in the National Living Wage and other associated changes. This
will increase employee costs by circa £0.8 million in the year. In addition,
the Group has recently renewed its utility contracts, which had been fixed two
years previously. Given the changes in the utility market since that date
there will an increase of £0.6 million in costs per annum.
Distribution costs increased 16% to £12.5 million (2022: £10.8 million) and
is reflective of the higher revenues generated in the period.
Included in distribution costs are commission payments to third parties which
sell product on behalf of QUIZ. These increased as a result of the higher
revenues generated through concessions and International franchise partners.
Also reflected in the increase in distribution costs are higher carriage costs
to stores, concessions and franchises as well as to online customers further
to the increased revenues generated and inflationary increases incurred during
the year.
Other operating income
Other operating income of £0.2 million (2022:£1.0 million) was generated in
the period. The current year income arose from the disposal of inventory
which was no longer appropriate for sale through our existing revenue
channels. The prior year income comprised £0.6 million from the utilisation
of the Government's Coronavirus Job Retention Scheme and £0.4 million of
payments received in relation to coronavirus grants made available to retail
businesses which were closed due to national or local restrictions.
Finance costs
The finance cost of £0.2 million (2022: £0.1 million) primarily relates to
interest costs arising on the lease payments for stores in accordance with
IFRS 16.
Taxation
In the current year the Group recorded an income tax charge of £0.3 million
(2022: income tax credit of £1.3 million) which represents a reported tax
rate of a charge of 11.3% (2022: tax credit rate of 160.0%).
As at 31 March 2023 the deferred tax asset amounted to £1.0 million (2022:
£1.0 million). This balance reflects the anticipated future cash benefit
expected to be derived from utilising previously generated tax losses and
available capital allowances in excess of the recorded net book value.
The remaining unrecognised deferred tax asset at 31 March 2023 amounts to
£0.5 million (2022: £0.4 million).
Earnings per share
Basic earnings per share for 2023 was 1.64 pence per share (2022: 1.65 pence).
Dividends
No dividend was paid during the year (2022: £Nil). Given the level of
operating profits generated in the current year the Board does not recommend
the payment of a final dividend.
Cash flow and cash position
Cash, net of bank borrowings, at the year-end amounted to £6.2 million (2022:
£4.4 million).
Net cash flow from operating activities resulted in an inflow of £5.9 million
(2022: inflow of £5.3 million). Reflected in this inflow of cash is a £0.9
million working capital outflow (2022: inflow of £0.2 million). The outflow
arose further to the increased revenues year-on-year giving rise to increased
inventory and receivables balances which was partially offset by higher trade
payables.
Spend on intangible assets and property, plant and equipment amounted to £0.5
million and £2.0 million respectively (2022: £0.2 million and £0.3
million).
Included in property, plant and equipment was investment in new or relocating
stores amounting to £1.5 million in year, arising from three new stores and
two relocations during the year and spend on two stores opened shortly after
the year end. In addition, two new stores opened shortly after the year
end.
Loans, being amounts drawn down on the Group's working capital facility which
are repayable in less than one year, at 31 March 2023 of £1.4 million was
consistent with the previous year.
The payment of lease liabilities amounted to £1.8 million (2022: £1.9
million) reflecting lease charges and the increased period of trading for the
relevant stores in the past year. Given a number of new leases were entered
into during the year the amounts outstanding in relation to lease liabilities
increased to £6.9 million (2022: £1.1 million).
Foreign currency hedging
The Group currently undertakes foreign exchange transactions.
The primary outflow of foreign exchange relates to the purchase of stock,
primarily in Chinese Renminbi. The primary inflow of foreign exchange relates
to Euro denominated revenues generated in Ireland.
The Group manages the risk associated with foreign currency fluctuations
through the use of forward contracts for the sale or the purchase of the
respective currency for a period between six and twelve months in advance. We
have currently hedged our expected currency outflows in respect of Chinese
Renminbi for the remainder of the financial year to 31 March 2024.
QUIZ plc
Consolidated statement of comprehensive income
Year ended 31 March 2023
Notes 2023 2022
£000 £000
Continuing operations
Revenue 2 91,680 78,371
Cost of sales (35,166) (31,074)
Gross profit 56,514 47,297
Administrative costs (41,728) (36,578)
Distribution costs (12,544) (10,820)
Government grants 3 - 1,010
Other operating income 214 1
Total operating costs (54,058) (46,387)
Operating profit 5 2,456 910
Finance income 6 89 -
Finance costs 6 (248) (122)
Profit before income tax 2,297 788
Income tax (charge)/credit 7 (260) 1,261
Profit for the year ( ) 2,037 2,049
Other comprehensive income: ( )
Foreign currency translation differences - foreign operations 138 (20)
Profit and total comprehensive income for the year attributable to owners of 2,175 2,029
the parent
( )
Profit per share:
Basic and diluted earnings per share 8 1.64p 1.65p
All of the above income is attributable to the shareholders of the Company.
QUIZ plc
Consolidated statement of financial position
As at 31 March 2023
Notes 31 March 31 March
2023 2022
£000 £000
Assets
Non-current assets
Property, plant and equipment 10 4,688 3,985
Right of use assets 11 6,523 1,108
Intangible assets 12 2,703 2,782
Deferred tax assets 18 957 964
Total non-current assets 14,871 8,839
Current assets
Inventories 13 12,322 11,710
Trade and other receivables 14 7,429 6,425
Cash and cash equivalents 22 7,575 5,840
Total current assets 27,326 23,975
Total assets 42,197 32,814
Liabilities
Current liabilities
Trade and other payables 15 (12,602) (11,466)
Loans and borrowings 16 (1,410) (1,420)
Lease liabilities 11 (1,909) (954)
Derivative financial liabilities 17 (65) (65)
Corporation tax payable (291) -
Total current liabilities (16,277) (13,905)
Non-current liabilities
Lease liabilities 11 (4,967) (185)
Deferred tax liabilities 18 (20) (21)
Total non-current liabilities (4,987) (206)
Total liabilities (21,264) (14,111)
Net assets 20,933 18,703
Equity
Called-up share capital 20 373 373
Share premium 20 10,315 10,315
Merger reserve 20 1,130 1,130
Retained earnings 20 9,115 6,885
Total equity 20,933 18,703
QUIZ plc
Consolidated statement of changes in equity
Year ended 31 March 2023
Share Share premium Merger reserve Retained earnings Total
capital
£'000 £'000 £'000 £'000 £'000
At 1 April 2021 373 10,315 1,130 4,804 16,622
Profit and total comprehensive income for the year - - - 2,029 2,029
Share-based payments charge - - - 52 52
At 31 March 2022 373 10,315 1,130 6,885 18,703
Profit and total comprehensive income for the year - - - 2,175 2,175
Share-based payments charge - - - 55 55
At 31 March 2023 373 10,315 1,130 9,115 20,933
QUIZ plc
Consolidated cash flow statement
Year ended 31 March 2023
Notes Year ended Year ended
31 March 31 March
2023 2022
£000 £000
Cash flows from operating activities
Cash generated by operations
Profit after tax for the year 2,037 2,049
Adjusted for:
Depreciation of property, plant and equipment 1,263 1,522
Depreciation of right-of-use assets 1,898 1,873
Amortisation of intangible assets 589 832
Share-based payment charges 55 52
Exchange movement 126 (20)
Finance income (89) -
Finance cost expense 248 122
Income tax charge/(credit) 260 (1,261)
Increase in inventories (612) (623)
Increase in receivables (1,384) (2,454)
Increase in payables 1,136 3,308
Net cash generated from operating activities 5,527 5,400
Interest paid (18) (40)
Income taxes refunded/(paid) 417 (62)
Net cash inflow from operating activities 5,926 5,298
Cash flows from investing activities
Payments to acquire intangible assets (510) (200)
Payments to acquire property, plant and equipment (1,965) (290)
Interest received 89 -
Net cash outflow from investing activities (2,386) (490)
Cash flows from financing activities
Loans (repaid)/received (10) 14
Payment of lease liabilities (1,807) (1,908)
Net cash outflow from financing activities 21 (1,817) (1,894)
Net increase in cash and cash equivalents 1,723 2,914
Cash and cash equivalents at beginning of year 5,840 2,927
Effect of foreign exchange rates 12 (1)
Cash and cash equivalents at end of year 22 7,575 5,840
The Group considers overdrafts to be an integral part of its cash management
activities and these are included in cash and cash equivalence for the
purposes of the cash flow statement.
Selected notes to the Group financial statements
Year ended 31 March 2023
1 Significant accounting policies
General information
Quiz Plc (the 'parent company') is a public limited company, incorporated and
domiciled in Jersey. It is listed on AIM. The registered office of the Company
is 22 Grenville Street, St Helier, Jersey, Channel Islands E4 8PX. The
principal activity of the group is that of retailing clothes.
Basis of preparation
The Board of Directors approved this preliminary announcement on 4 July 2023.
Whilst the financial information included in the preliminary announcement
has been prepared in accordance with the recognition and measurement criteria
of UK-adopted International Accounting Standards and the Companies (Jersey)
Law 1991, this announcement does not itself contain sufficient information to
comply with all the disclosure requirements of UK-adopted International
Accounting Standards and does not constitute statutory accounts within the
meaning of Companies (Jersey) Law 1991 but is derived from the accounts of the
Company for the years ended 31 March 2023 and 2022. The financial
information is prepared on the same basis as set out in the statutory accounts
for the year ended 31 March 2022.
The financial statements are presented in Pounds Sterling because that is the
currency of the primary economic environment in which the Group operates.
Monetary amounts in these financial statements are rounded to the nearest
thousand. Foreign operations are included in accordance with the policies set
out below.
The annual financial statements have been prepared on the historical cost
basis, except for certain financial assets and liabilities which are carried
at fair value.
The preparation of financial statements in conformity with UK-adopted
International Accounting Standards requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported year. Although these estimates are based on management's best
knowledge of current events and actions, actual results ultimately may differ
from those estimates.
The statutory accounts for the year ended 31 March 2022 have been filed with
the Jersey Companies Registry and the statutory accounts for the year ended 31
March 2023 will be filed in due course. The auditors have reported on the
accounts for the years ended 31 March 2023 and 2022; their reports were
unqualified, did not include any matters to which the auditor drew attention
by way of emphasis and under 113B (3) or 113B (4) of the Companies (Jersey)
Law 1991.
Accounting standards in issue but not yet effective
At the date of issue of these financial statements, there are several
standards and interpretations issued by the IASB that are effective for
financial statements after this reporting period. Of these new standards,
amendments and interpretations, there are none which are expected to have a
material impact on the Group's consolidated financial statements.
Going concern
The Directors have prepared a detailed forecast with a supporting business
plan for the foreseeable future to determine whether the Group will have
adequate resources to enable it to operate as a going concern for the
foreseeable future.
When preparing this forecast, the Directors considered the current trading
levels, which have been consistent with management's expectation, and the
outlook for the Group against their detailed base case scenario and further
downside scenarios.
At 31 March 2023, the Group had cash net of bank borrowings of £6.2 million,
being a £7.6 million cash balance offset by a £1.4 million bank loan , and
£2.1 million of unutilised banking facilities (2022: £4.4 million of net
cash and £2.1 million of unutilised banking facilities).
Borrowing facilities
As at 4 July 2022, the Group has £4.0 million of banking facilities, which
were recently extended until 30 June 2024. These facilities comprise a £2.0
million overdraft and £2.0 million working capital facility. There are no
financial covenants associated with these facilities, which are reviewed
annually. Whilst the facilities are repayable on demand the Directors believe
that these facilities will be available to the Group through to 30 June 2024
and will be renewed in due course.
The Group had a net cash balance of £3.4 million at 4 July 2023, being a
£3.7 million cash balance offset by a £0.3 million bank loan and £3.7
million of unutilised banking facilities.
Forecast scenarios
The Directors have reviewed management's business plan forecast for the twelve
months from the date when these financial statements are authorised to be
issued. The forecasts have been produced on the following basis:
• Given the strong demand at the start of the previous year the base
case scenario assumes stores and concessions sales are lower on a
like-for-like basis in the four months to July 2024. Thereafter sales
forecast to be a similar or slightly higher levels on a like-for-like basis.
Web sales through the QUIZ website are assumed to be at a level similar to
those generated in the previous year. The assumed sales levels are broadly
consistent with those currently achieved.
• Downside scenario assumes reduced sales across the next year to
reflect reduced demand including assumed reductions in store and concessions
sales of 10% on a like-for-like basis. Online sales are assumed to be 10%
below their base case scenario.
Within each forecast, management have reflected outstanding financial
commitments and the impact of previously realised cost savings. There are no
further anticipated savings incorporated in response to any downside scenario
for reduced revenues. Further actions could be undertaken to mitigate against
any shortfalls arising from these scenarios. These include reducing operating
costs and capital expenditure, ceasing or suspending loss-making activities
and optimising working capital.
The Base Case and Downside scenario forecasts indicate the Group will remain
within its available borrowing facilities through the forthcoming twelve month
period. Under the downside scenario the Group has more than £5.0 million
available liquidity headroom through-out the period under consideration.
Going concern basis
Based on the assessment outlined above, the Directors have a reasonable
expectation that the Group has access to adequate resources to enable it to
continue to operate as a going concern for the foreseeable future, being a
period of at least twelve months from the date when these financial statements
are authorised to be issued. For these reasons, the Directors consider it
appropriate for the Group to continue to adopt the going concern basis of
accounting in preparing the Annual Report and financial statements.
Accordingly, the financial statements of the Group have been prepared on a
going concern basis in accordance with UK-adopted International Accounting
Standards and the Companies (Jersey) Law 1991.
2 Revenue
An analysis of revenue by geographical destination is as follows:
2023 2022
£000 £000
Online 29,872 26,742
International 16,357 14,862
UK stores and concessions 45,451 36,767
91,680 78,371
2023 2022
£000 £000
United Kingdom 75,077 63,176
Rest of the world 16,603 15,195
91,680 78,371
As at 31 March 2023 non-current assets in the United Kingdom were £14,459,000
(FY 2022: £8,616,000) with £412,000 (FY 2022: £223,000) located in the rest
of the world.
3 Government grants
2023 2022
£000 £000
Government support - furlough payments - 640
Government support - grant income - 370
- 1,010
4 Employee benefit expenses
Employment costs and average monthly number of employees (including Directors)
during the year were as follows:
2023 2022
£000 £000
Wages and salaries 14,970 14,420
Social security costs 1,142 1,023
Other pension costs 257 302
Agency costs 2,857 2,065
Share-based payment charges 55 52
19,281 17,862
No. No.
Retail 727 689
Distribution 98 97
Administration 150 136
975 922
Included above is £697,000 in respect of Directors' remuneration (FY 2022:
£679,000).
5 Operating profit
Operating profit is stated after charging/(crediting):
2023 2022
£000 £000
Cost of inventories recognised as an expense 35,166 31,074
Distribution costs 12,544 10,820
Employment costs 19,236 17,810
Share based payments charges 55 52
Depreciation of property, plant and equipment 1,263 1,522
Depreciation of right-of-use assets 1,898 1,873
Amortisation of intangible assets 589 832
Short-term and variable lease costs 2,257 2,105
Foreign exchange losses/(gains) 86 (53)
Government grants - (1,010)
Other operating income (214) (1)
Other expenses 16,355 12,441
6 Finance income and expense
2023 2022
£000 £000
Interest on cash deposits 89 -
Finance income 89 -
2023 2022
£000 £000
Interest on lease liabilities 231 82
Interest on loans and overdrafts 17 40
Finance expense 248 122
7 Income tax
2023 2022
£000 £000
UK corporation tax - current year 393 -
UK corporation tax - prior year (53) (244)
Foreign tax 19 -
Deferred tax - current year 104 (1,088)
Deferred tax - prior year (203) 71
Tax on profit 260 (1,261)
Reconciliation of effective tax rate
Profit on ordinary activities before taxation 2,297 788
Profit on ordinary activities multiplied by standard rate of UK corporation 436 150
tax of 19%
Expenses not deductible for tax purposes 43 42
Change in unrecognised deferred tax assets 32 (964)
Impact of overseas tax rate (18) (2)
Impact on deferred tax of increase in UK corporation tax rate - 13
Utilisation in current year of previously unrecognised deferred tax asset - (327)
Write down of previously recognised deferred tax asset 23 -
Adjustments to previous years (256) (173)
260 (1,261)
8 Earnings per share
Number of shares: 2023 2022
No. No.
Weighted number of ordinary shares outstanding - basic and diluted
124,230,905 124,230,905
Earnings: £000 £000
Profit 2,037 2,049
Earnings per share: Pence Pence
Basic earnings per share 1.64 1.65
The diluted earnings per share is the same as the basic earnings per share
each year as the average share price during the year was less than the prices
applicable to the outstanding options and therefore the outstanding options
were not dilutive.
9 Dividends
No dividends in respect of 2023 are proposed (FY 2022: £Nil).
10 Property, plant and equipment
Leasehold Motor Computer Fixtures, Total
improvements vehicles equipment fittings and £000
£000 £000 £000 equipment
£000
Cost
At 1 April 2022 601 133 1,583 14,799 17,116
Additions 199 18 133 1,616 1,966
Disposals (8) (14) (18) (593) (633)
At 31 March 2023 792 137 1,698 15,822 18,449
Depreciation
At 1 April 2022 416 91 967 11,657 13,131
Charge 165 22 201 875 1,263
Disposals (8) (14) (18) (593) (633)
At 31 March 2023 573 99 1,150 11,939 13,761
Net book value
At 31 March 2023 219 38 548 3,883 4,688
At 31 March 2022 185 42 616 3,142 3,985
11 Right to use assets and lease liabilities
Property
£000
Cost
At 1 April 2022 3,872
Additions 7,313
Disposals (2,297)
At 31 March 2023 8,888
Amortisation
At 1 April 2022 2,764
Charge 1,898
Disposals (2,297)
At 31 March 2023 2,365
Net book value
At 31 March 2023 6,523
At 31 March 2022 1,108
The Group presents lease liabilities separately within the statement of
financial position. The movement in the year comprised:
2023 2022
£000 £000
At 1 April 2022 1,139 2,965
Additions 7,313 -
Interest expense related to lease liabilities 231 82
Repayment of lease liabilities (including interest) (1,807) (1,908)
At 31 March 2023 6,876 1,139
Current lease liabilities 1,909 954
Non-current lease liabilities 4,967 185
The above leases relate to the use of the Group's Head Office, Distribution
Centre and a number of its retail stores. Lease arrangements in respect of
retail stores are a mix of leases with fixed rents which are reflected in the
right-of -use assets and the associated lease liabilities and leases where
charges are related to the revenues generated in the relevant retail stores.
Costs in the year in respect of facilities in the year with fixed rentals
amounted to £2,129.000 (2022: £1,955,000) and £2,257,000 in respect of
leases with charges related to the revenue generated within that store (2022:
£2,105,000).
Short-term operating leases
At the balance sheet date, the Group had outstanding commitments for future
minimum lease payments under non-cancellable leases which fall due as follows:
2023 2022
£000 £000
Within one year 85 109
12 Intangibles
Goodwill Computer Trademarks Total
software
£000 £000 £000 £000
Cost
At 1 April 2022 6,175 3,827 165 10,167
Additions - 510 - 510
At 31 March 2023 6,175 4,337 165 10,677
Amortisation
At 1 April 2022 5,248 2,060 77 7,385
Charge - 572 17 589
At 31 March 2023 5,248 2,632 94 7,974
Net book value
At 31 March 2023 927 1,705 71 2,703
At 31 March 2022 927 1,767 88 2,782
The goodwill primarily arose when Shoar (Holdings) Limited acquired the entire
share capital of Tarak Retail Limited in 2012 and reflects the difference
between the fair value of the consideration transferred and the fair value of
assets and liabilities purchased. Goodwill is assessed for impairment by
comparing the carrying value to value-in-use calculations. Value in use has
been estimated using cash flow projections based on detailed budgets and
forecasts over the period of three years, with a decline rate of 15% (FY 2022:
10%) and a pre-tax discount rate of 10% (FY 2022: 10%) applied, being the
Directors' estimate of the Group's cost of capital, with no terminal value.
The budgets and forecasts are based on historical data and the past experience
of the Directors as well as the future plans of the business. No reasonable
change in any of the assumptions would result in an impairment charge and
therefore no sensitivity analysis is disclosed. The Directors do not consider
goodwill to be impaired in the current year.
13 Inventories
2023 2022
£000 £000
Finished goods and goods for resale 12,322 11,710
The cost of inventories recognised as an expense during the year in respect of
continuing operations amounted to £35,166,000 (2022: £31,074,000). The cost
of inventories included a net credit in respect of write-downs of inventory to
net realisable value of £875,000 (2022: credit of £1,138,000). Inventories
are stated after provisions for impairment of £1,675,000 (2022: £2,550,000).
14 Trade and other receivables
2023 2022
£000 £000
Trade receivables - gross 3,292 3,948
Less allowance for expected credit losses (calculated under IFRS 9) (333) (327)
Trade receivables - net 2,959 3,621
Other receivables 2,113 422
Current tax receivable - 380
Prepayments and accrued income 2,357 2,002
7,429 6,425
The Directors consider that the fair value of trade and other receivables is
not materially different from the carrying value.
15 Trade and other payables
2023 2022
£000 £000
Trade payables 7,116 5,155
Other taxes and social security costs 1,610 979
Accruals 2,585 3,733
Other payables 1,291 1,591
Amounts due to related parties - 8
12,602 11,466
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The Directors consider that the fair value of
trade and other payables is not materially different from the carrying value.
Included within other payables at the year-end date was a balance of £59,000
(FY 2022: £52,000) owed to the Group's pension scheme.
16 Loans and borrowings
2023 2022
£000 £000
Bank loans 1,410 1,420
Current 1,410 1,420
The Group's overdraft and other credit facilities amount to £4.0 million
(2022: £3.5 million) and are secured by an unlimited multilateral and
cross-company guarantee given by Zandra Retail Limited and Tarak International
Limited and also by a limited guarantee given by, and by a floating charge
over the assets of, Zandra Retail Limited and Tarak International Limited. The
bank also holds a right of set-offs between Zandra Retail Limited and Tarak
International Limited. All entities included in the guarantee are wholly owned
subsidiaries in the Group. In addition, the Company has provided a parent
company guarantee with respect to the facilities.
In addition, credit facilities are secured by a bond and floating charge from
Tarak Retail Limited over the whole of its property and undertakings.
The bank overdraft and other credit facilities are annual facilities and are
repayable on demand. These facilities were renewed after the year end and are
next subject to review in June 2024.
Borrowings are denominated and repaid in Pounds Sterling, have contractual
interest rates that are either fixed rates or variable rates linked to the
Bank of England base rate that are not leveraged, and do not contain
conditional returns or repayment provisions other than to protect the lender
against credit deterioration or changes in relevant legislation or taxation.
17 Derivative financial instruments
The following is an analysis of the derivative financial instruments
liability:
2023 2022
£000 £000
Foreign currency options 65 65
Forward foreign exchange contracts are used to hedge exposure to fluctuations
in foreign exchange rates that arise in the normal course of the Group's
business.
As at 31 March 2023, the Group had commitments to buy the equivalent of
£3,050,000 of Chinese Renminbi (FY 2022: £5,200,000).
18 Deferred tax
The following is an analysis of the deferred tax assets:
Tax Losses Fixed asset timing differences Total
£000 £000 £000
Balance brought forward 634 330 964
Credit to income statement (65) 58 (7)
Total deferred tax asset at end of year 569 388 957
At 31 March 2023 there was a total of unprovided deferred tax assets of
£471,000 (2022 - £413,000) in relation to fixed asset timing differences.
The following is an analysis of the deferred tax liabilities:
Fixed asset timing differences
£000
Balance brought forward 21
Credit to income statement (1)
Total deferred tax asset at end of year 20
19 Financial instruments
The following table shows the carrying amounts and fair values of financial
assets and liabilities, other than derivatives. All financial liabilities are
measured at amortised cost. The derivative liability, which is measured at
fair value, is level 2 in the fair value hierarchy.
2023 2022
£000 £000
Category of financial instruments
Carrying value of financial assets:
Cash and cash equivalents 7,575 5,840
Trade and other receivables 5,072 4,423
Total financial assets 12,647 10,263
Carrying value of financial liabilities:
Trade and other payables (10,992) (10,479)
Bank and other borrowings (1,410) (1,420)
Derivative financial instruments (65) (65)
Lease liabilities (6,876) (1,139)
Total financial liabilities (19,343) (13,103)
The fair value and carrying value of financial instruments have been assessed
and there is deemed to be no material differences between fair value and
carrying value.
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.
20 Share capital and reserves
2023 2022
£000 £000
Share capital - allotted, called up and fully paid
124,230,905 ordinary shares of 0.3 pence each (31 March 2022: 124,230,905) 373 373
Share premium 10,315 10,315
Share capital
The issued share capital at 31 March 2023 comprised 124,230,905 ordinary
shares of 0.3 pence each with a nominal value of £372,693. The company has
one class of ordinary share which have equal right, preferences and
restrictions.
Share premium
The share premium reserve contains the premium arising on the issue of equity
shares, net of issue expenses incurred by the Company. The 6,583,851 ordinary
shares of 0.3 pence each with a nominal value of £19,752 on 28 July 2017 were
issued at a price of 161 pence per share giving rise to a share premium of
£10,315,248 (net of expenses).
Merger reserve
The merger reserve arose on the purchase of certain subsidiaries. The merger
reserve represents the difference between the cost value of the shares
acquired less the cost value of the shares issued for the purchase of each
company and the stamp duty payable in respect of these transactions.
Retained earnings
The movement on retained earnings is as set out in the statement of changes in
equity. Retained earnings represent cumulative profits or losses, net of
dividends and other adjustments.
21 Change in liabilities arising from financing activities
2022 Cash flow Non-cash 2023
changes
£000 £000 £000 £000
Cash at bank and in hand 5,840 1,723 12 7,575
Net cash per statement of cash flows 5,840 1,723 12 7,575
Borrowings (1,420) 10 - (1,410)
Net cash before lease liabilities 4,420 1,733 12 6,165
Lease liabilities (1,139) 1,807 (7,544) (6,876)
Net debt after lease liabilities 3,281 3,540 (7,532) (711)
Non-cash changes relate to the translation of foreign currency balances at the
end of the period and lease acquisitions, disposals and modifications.
22 Cash and cash equivalents
2023 2022
£000 £000
Cash at bank and in hand 7,575 5,840
Net cash at bank and in hand 7,575 5,840
23 Financial commitments
Capital commitments
The Group had £1.9 million of capital commitments of at 31 March 2023 (FY
2022: Nil) which were not provided for in the financial statements.
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