REG - SIG PLC - Half-year Report
08/08/2023 07:00
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RNS Number : 5720I SIG PLC 08 August 2023
8 August 2023
SIG plc
Results for the six months to 30 June 2023
SIG plc ("SIG", "the Group" or "the Company") today announces its half year
results for the six months ended 30 June 2023 ("H1 2023" or "the period").
( ) H1 2023 H1 2022
Revenue £1,423.4m £1,358.5m
LFL(1) sales growth (0.2)% 21.2%
Gross margin 25.6% 26.2%
Underlying(2) operating profit £32.7m £42.5m
Underlying(2) operating margin 2.3% 3.1%
Underlying(2) profit before tax £15.0m £28.9m
Underlying(2) earnings per share 0.6p 1.6p
Net debt £468.8m £431.8m
Net debt (pre-IFRS 16) £176.2m £164.4m
Statutory results H1 2023 H1 2022
Revenue £1,423.4m £1,358.5m
Operating profit £30.0m £39.8m
Profit before tax £12.2m £26.2m
Total profit after tax £4.7m £15.9m
Basic earnings per share 0.4p 1.4p
1. Like-for-like ("LFL") is defined as the growth/(decline) in sales per
working day in constant currency excluding any current and prior year
acquisitions and disposals. Sales are not adjusted for branch openings or
closures.
2. Underlying represents the results before Other items. Other items relate
to the amortisation of acquired intangibles, impairment charges, costs related
to acquisitions, cloud computing configuration and customisation costs and
other specific items.
Financial highlights
· Group revenue of £1,423m, representing flat like-for-like(1) ("LFL")
revenue versus prior year, reflecting volume declines offset by input price
inflation:
o Weaker trading conditions across all geographies
o Inflation tailwinds moderated as expected
· Group underlying operating profit of £33m with operating margin of
2.3%
· Disciplined cash management; net debt of £468.8m post‐IFRS 16 and
£176.2m pre‐IFRS 16
Operational highlights
· Resilient LFL revenue performance by our largest Operating Companies
in challenging markets, with UK Interiors up 4% and France Exteriors up 2%
· Margins temporarily impacted by challenging market conditions and
higher than normal operating cost inflation, but resilient in France at c5%,
and Germany and UK Interiors improving margins year-over-year
· Continuing progress in all geographies in improving underlying
operational performance in H1, with initiatives focusing on delivering an
improved operating margin in near and medium term
· Strategic actions taken over last three years mean that the Group is
in a strong position, operationally and financially, to navigate current
markets
Outlook
· Market conditions expected to remain challenging across the Group's
geographic end markets in the second half, alongside further moderation in
price inflation
· Second half expected to see greater benefit from productivity
initiatives, and the Group's full year underlying operating profit is expected
to be in line with the Board's recently revised guidance
· Strong positive free cash flow expected in H2 as seasonal working
capital unwinds and working capital discipline continues to deliver benefits
· Board remains confident in improving the Group's operating margin to
5% in the medium term
The Group will hold a Capital Markets presentation in London on 23 November
2023, including an update on strategy from CEO Gavin Slark, who joined the
company in February 2023. Further details for investors and analysts will
follow in due course.
Commenting, Gavin Slark, Chief Executive Officer, said:
"Our performance in the first half reflects the challenging market conditions
we are currently facing, with the Group's LFL revenue growth flat
year-on-year. Despite these conditions, I'm very pleased with the progress
we are making on many fronts to improve the business, notably with the
initiatives across our Operating Companies to improve our ability to drive
higher levels of profitable growth when market conditions recover. In the
first half these initiatives reflected a continuing focus on our people, our
branches, and our productivity, creating a platform that will allow us to
capture and maximise the significant opportunities I see for the medium term.
"Looking ahead, while we expect market conditions in the second half to remain
difficult, we remain confident the business will grasp the opportunities it
has to continue to improve its underlying operational performance. This
will, in turn, deliver higher levels of profitability as we drive towards our
medium-term margin target of 5%. The Group is financially and commercially
well placed to drive meaningful shareholder value in the medium and long
term."
A live presentation and Q&A session, hosted by Gavin Slark, CEO, and Ian
Ashton, CFO, will take place at 10am UK time today at the offices of FTI
Consulting. The presentation and Q&A session will be webcast live, and a
recording of both will be available after the event.
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Enquiries
SIG plc +44 (0) 114 285 6300
Gavin Slark Chief Executive Officer
Ian Ashton Chief Financial Officer
Sarah Ogilvie Head of Investor Relations
FTI Consulting Richard Mountain +44 (0) 20 3727 1340
Joint brokers to SIG
Peel Hunt LLP Mike Bell / Charles Batten +44 (0) 20 7418 8900
Investec Bank plc Bruce Garrow / David Anderson +44 (0) 20 7597 5970
OPERATIONAL REVIEW
Strategic progress
We operate across six European geographies with a total branch network of c440
sites and over 7,000 people. During the first half of 2023, we have
continued with a number of internal programmes across these geographies
focused on improving our Group operating margin to 5% in the medium term.
While market conditions have provided a near-term headwind to margin
improvement, the initial effects of these initiatives have partially offset
the negative impact in the period of demand weakness and operating cost
inflation. We will continue to prioritise these initiatives in the second
half and, as we manage through the economic cycle, we expect further benefits
from the focus on branch performance, on efficiency and productivity, and on
our high levels of employee engagement.
In the UK our Exteriors business has continued its programme of upgrading and
refreshing its branches and retail counters, and launched new branch and
employee recognition schemes in H1 to continue to support and drive
performance. The business also continued to expand its solar category
offering. In the UK Interiors business, we have been embedding new IT tools
to support branch sales and margin, continuing initiatives to develop product
mix into higher margin categories, and working to further improve employee
engagement. The UK Interiors margin has continued to improve, increasing by
0.6% over H1 2022, despite the demand backdrop, and this reflects the progress
made with initiatives such as these as well as the changes that have taken
place over the last two years. We are confident that this business will
continue to deliver further margin improvement over time, especially when
demand normalises.
In France, Larivière, our specialist roofing business, has made good progress
on product category expansion to support medium term margin improvement. In
H1, Larivière expanded products in own-brand lines in slate and our Irondel
range of products, and expanded its solar product offering. In LiTT, our
French Interiors business, we have continued to focus on performance
management across the branch network and sales execution along with employee
engagement. Over the past two years we have upgraded the branch network
across LiTT, including opening new branches and making some strategic branch
relocations to capture growth in new areas. In the period we also focused on
driving up sales and performance at these new and refreshed locations.
In Germany, we have continued to focus on branch performance and operational
productivity metrics, as well as further developing our product mix in
technical insulation and flooring. In our smaller Operating Companies
(Ireland, Poland and Benelux) strategic development initiatives have included
new higher margin category sourcing in Ireland, and in Poland the further
development of operational productivity tools and a continued focus on
maintaining very strong employee engagement. In Benelux our new Managing
Director starts in October and we are confident he will build on recent early
progress and reinvigorate that business.
Trading overview
Group LFL revenue was flat year‐on‐year in the period, with the continued
positive tailwind from input price inflation being offset by lower volumes.
The overall impact of inflation added an estimated 9% to Group revenue
growth in the period. As expected, the year-on-year impact of price
inflation moderated during H1 compared to the impact during 2022, as we
annualise some of the significant prior year price increases.
Reported Group revenue was 5% higher in the period, including 3% from
acquisitions, together with 2% in aggregate from movements in exchange rates
and working days.
1 January to 30 June 2023 LFL growth £m
Revenue
UK Interiors 4% 382
UK Exteriors (2)% 221
UK 1% 603
France Interiors 1% 116
France Exteriors 2% 250
Germany 0% 235
Poland (9)% 110
Benelux 7% 62
Ireland (18)% 47
EU (1)% 820
Group 0% 1,423
Market conditions were challenging through H1 across both our EU based
businesses (58% of revenue) and in the UK (42% of revenue). This included a
softening in demand in France in the last two months of the period, when
product volumes to new-build construction projects were weaker in both
residential and commercial. Despite that, we reported positive sales growth
in both of our French businesses. Demand was also notably weaker in Germany
in May and June, which was caused by softness in new-build markets. This has
included commercial new-build, the majority of our end-market in Germany.
In the UK, our Interiors business experienced weaker market demand, most
notably in residential new-build, but continued to improve its competitive
position. The business also services the commercial and public building
sectors, which were slightly less impacted than residential. UK Exteriors
also experienced weaker volumes, but was also up against particularly strong
comparators, notably in its Building Solutions business.
Volumes and market conditions were notably weaker in Poland and Ireland over
the period as a whole, with both also coming up against especially strong
prior year comparators. Our Benelux business continued the gradual recovery
of market share lost over previous years.
Whilst we remain focused on ensuring the Group is positioned to capture the
long-term growth opportunities across our markets, in the first half we have
also ensured we are operating as efficiently as possible during the current
period of market weakness. We will continue to focus on cost discipline and
on ensuring that we have the appropriate level of cost and investment in
place, in the right areas.
Outlook
As previously reported in our Trading Update on 5 July 2023, we expect weak
and uncertain demand conditions throughout the rest of the year, along with a
continued, but further moderating, revenue tailwind from input price
inflation.
We continue to expect the second half to benefit from ongoing productivity
initiatives and an expected profit of around £3m on one specific property
move. The Group's full year underlying operating profit is therefore
expected to be in line with the Board's recently revised guidance.
Across the remainder of the year and beyond, we will continue to progress the
strategic and operational initiatives which underpin our ambition for the
Group.
As a European market leader in the supply of specialist insulation, and with
80% of the Group's sales covering insulation and the wider building envelope,
we are well‐positioned to benefit from long‐term structural growth
drivers, notably sustainable construction and decarbonisation of buildings.
We also remain confident in our ability to further grow our market
positions, and to improve our profitability when market conditions recover.
The Board remains confident in our growth path to 5% operating margin in the
medium term.
FINANCIAL REVIEW
Revenue
Group revenue of £1,423m (H1 2022: £1,359m) was 5% higher on a reported
basis, including 3% from acquisitions, 2% from movements on exchange rates and
only a marginal impact from differences in numbers of working days. LFL
revenue was flat year-on-year in the period, with the pass through of product
price inflation being offset by volume declines in the majority of our key
markets. We estimate the impact of inflation on revenue growth for the half
year was approximately 9%, with this impact reducing during the period.
Profit
Underlying and statutory gross profit increased 2.6% to £364.8m (H1 2022:
£355.7m) with a resilient gross profit margin of 25.6% (H1 2022: 26.2%).
The slight reduction in gross margin was due partly to strong comparatives,
especially in our UK Exteriors business, and also pricing pressure in the
current difficult demand environment. We are confident the businesses are
managing these dynamics effectively.
The Group's underlying operating costs were £332.1m (H1 2022: £313.2m).
The increase was primarily due to the impact of inflation on operating
costs, with the biggest impact being on wages and salaries, and property and
energy costs.
As a result, Group underlying operating profit was £32.7m (H1 2022: £42.5m),
at an operating margin of 2.3% (H1 2022: 3.1%). Reported operating profit
was £30.0m (H1 2022: £39.8m) after Other items of £2.7m (H1 2022: £2.7m),
which are set out further below.
Segmental analysis
UK
Underlying Underlying LFL sales Underlying operating Underlying operating
revenue revenue H1 2023 profit profit
H1 2023 H1 2022 H1 2023 H1 2022
£m £m £m £m
UK Interiors 381.6 331.9 4% 6.6 3.8
UK Exteriors 221.1 224.0 (2)% 6.0 11.1
UK 602.7 555.9 1% 12.6 14.9
Reported revenue in UK Interiors, a specialist insulation and interiors
distribution business, increased by 15% to £381.6m (H1 2022: £331.9m).
This included 10% from the acquisition of Miers in 2022, as well as a 1%
impact from working days. LFL revenue grew 4% supported by a strengthened
market position and from input price inflation. The higher revenue drove an
operating profit of £6.6m for the half year (H1 2022: £3.8m) with the
business benefiting from driving higher sales through the existing branch
network capacity.
Reported revenue in UK Exteriors, a specialist roofing merchant, which also
includes our Building Solutions business, declined by 1%, with LFL revenue
down 2% to £221.1m (H1 2022: £224.0m). This was due mainly to reduced
demand in the RMI market, though still benefiting from purchase price
inflation. The decrease in revenue, together with a reduction in gross
margin, partly due to high prior year comparators, and operating cost
inflation, resulted in a reduction in operating profit to £6.0m (H1 2022:
£11.1m).
France
Underlying Underlying LFL sales Underlying operating Underlying operating
revenue revenue H1 2023 profit profit
H1 2023 H1 2022 H1 2023 H1 2022
£m £m £m £m
France Interiors 116.4 111.2 1% 6.4 7.4
France Exteriors 249.7 239.8 2% 12.1 15.3
France 366.1 351.0 1% 18.5 22.7
France Interiors, a structural insulation and interiors business trading as
LiTT, saw reported revenue increase by 5% to £116.4m (H1 2022: £111.2m), and
by 1% on a LFL basis. This was driven by continued input price inflation
pass through. Revenue growth was offset by increased margin pressure and
higher operating costs and these resulted in a £1.0m decrease in operating
profit to £6.4m (H1 2022: £7.4m).
Reported revenue in France Exteriors, a specialist roofing business trading as
Larivière, increased 4% to £249.7m (H1 2022: £239.8m), and by 2% on a LFL
basis. Revenue benefited from pass through of input price inflation, while
demand and volumes were lower due to reduction in consumer spending following
interest rate increases, as well as softening of the new build market. The
increase in revenue was offset by a reduction in some supplier rebates due to
lower volumes and increased operating costs due to inflation, resulting in an
operating profit decrease of £3.2m to £12.1m (H1 2022: £15.3m). During H2
the Larivière business will move into a new leased headquarters in Angers,
which will better support the needs of the business going forward. We have
owned the existing office building in Angers for many years, and the sale of
it will result in an expected profit on disposal in H2 of around £3m.
Germany
Underlying Underlying LFL sales Underlying operating Underlying operating
revenue revenue H1 2023 profit profit
H1 2023 H1 2022 H1 2023 H1 2022
£m £m £m £m
Germany 234.8 224.5 0% 9.6 8.3
Reported revenue in WeGo/VTi, our specialist insulation and interiors
distribution business in Germany, increased by 5% to £234.8m (H1 2022:
£224.5m). This included a 1% impact from the acquisition of Thermodämm in
2022. LFL revenue was flat year-on-year, with pass through of input price
inflation wholly offset by a decline in volumes, reflecting weaker market
conditions, particularly in new build. Good margin management resulted in an
improved operating profit of £9.6m (H1 2022: £8.3m).
Poland
Underlying Underlying LFL sales Underlying operating Underlying operating
revenue revenue H1 2023 profit profit
H1 2023 H1 2022 H1 2023 H1 2022
£m £m £m £m
Poland 110.2 115.1 (9)% 2.7 5.9
In our Polish business, a market leading distributor of insulation and
interiors, revenue decreased to £110.2m (H1 2022: £115.1m), representing a
9% decline on a LFL basis, due to weaker building activity overall and some
modest input price deflation. This, together with operating cost inflation,
resulted in an operating profit of £2.7m (H1 2022: £5.9m).
Benelux
Underlying Underlying LFL sales Underlying operating Underlying operating
revenue revenue H1 2023 (loss) (loss)
H1 2023 H1 2022 H1 2023 H1 2022
£m £m £m £m
Benelux 62.1 56.1 7% (1.6) (1.7)
Reported revenue from the Group's business in Benelux increased by 11% to
£62.1m (H1 2022: £56.1m) with LFL revenue up 7%. Revenue benefited from
increased volumes as the business recovered some market share from prior
years' losses, while the turnaround of the business remains in progress as
operational issues are tackled. Despite recent market share recovery, it
continues to trade with lower market share than it had previously. The first
half performance resulted in an operating loss of £1.6m (H1 2022: £1.7m
loss).
Ireland
Underlying Underlying LFL sales Underlying operating Underlying operating
revenue revenue H1 2023 profit profit
H1 2023 H1 2022 H1 2023 H1 2022
£m £m £m £m
Ireland 47.5 55.9 (18)% 0.5 3.0
Our business in Ireland is a specialist distributor of interiors and
exteriors, as well as a specialist contractor for office furnishing,
industrial coatings and kitchen/bathroom fit out. Reported revenue decreased
by 15% to £47.5m (H1 2022: £55.9m), and by 18% on a LFL basis as a result of
softening demand in the Irish market, which was greater than we had
anticipated. Operating profit reduced as a result by £2.5m to £0.5m (H1
2022: £3.0m), reflecting the lower revenue, combined with operating cost
inflation.
Reconciliation of underlying to statutory result
Other items, being items excluded from underlying results, during the period
amounted to £2.8m (H1 2022: £2.7m) on a pre-tax basis and are summarised in
the table below:
H1 2023
£m H1 2022
£m
Underlying profit before tax 15.0 28.9
Other items - impacting profit before tax:
Amortisation of acquired intangibles (1.6) (2.4)
Costs related to acquisitions (1.4) (0.2)
Cloud computing configuration and customisation costs (1.3) (0.8)
Onerous contract costs (0.2) -
Other specific items 1.8 0.7
Non-underlying finance costs (0.1) -
Total Other items (2.8) (2.7)
Statutory profit before tax 12.2 26.2
Other items are disclosed separately in order to provide a better indication
of the underlying earnings of the Group. Further details are provided in
Note 4 of the Interim Financial Statements.
Taxation
Tax for the six month period ended 30 June 2023 is determined based on
applying full year estimates of the annual effective tax rate for individual
jurisdictions to the underlying profit before tax for the six month period.
This results in a tax charge of 53.3% on underlying profit before tax (30
June 2022: 36.3%; 31 December 2022: 27.9%).
Tax losses cannot be surrendered or utilised cross border, and the Group is
therefore subject to tax in some countries and not in others. Tax losses in
the UK and Benelux businesses are not currently recognised as deferred tax
assets, which impacts the overall effective tax rate. The relative
proportions of these losses compared to the total Group underlying profit
before tax is also higher for H1 2023 compared to prior periods, and the
combination of these factors has led to the increase in the overall average
effective tax rate in the current period.
Pensions
The Group operates a number of pension schemes, four of which provide defined
benefits based upon pensionable salary. One of these schemes has assets held
in a separate trustee administered fund, and three are overseas book reserve
schemes. The UK defined benefit pension scheme obligation is calculated on a
year to date basis, using the latest triennial valuation as at 31 December
2019.
The IAS 19 valuation conducted as at 31 December 2022 has been updated to
reflect current market conditions, and as a result an actuarial gain of £0.1m
has been recognised within the Condensed Consolidated Statement of
Comprehensive Income. The total net pension liability in relation to defined
benefit schemes at 30 June 2023 is £21.0m (30 June 2022: £8.1m; 31 December
2022: £23.0m), including £13.5m deficit in the UK scheme. The movement in
the period relates principally to the actuarial gain of £0.1m together with
the scheduled annual contribution in the UK of £2.5m.
Financial position
Overall, the net assets of the Group increased by £5.3m to £273.1m from
£267.8m at 31 December 2022, with a cash position at the period end of
£106.3m (30 June 2022: £113.2m; 31 December 2022: £130.1m) and net debt
(post-IFRS 16) of £468.8m (30 June 2022: £431.8m; 31 December 2022:
£444.0m). Net debt on a pre-IFRS 16 basis was £176.2m (30 June 2022:
£164.4m, 31 December 2022: £160.3m).
The movement in post‐IFRS 16 net debt is due mainly to the movement in cash
noted below. An increase in net lease liabilities and receivables of £8.3m
due to lease renewals and extensions mainly in the UK and Germany, is offset
by a favourable currency movement of £8.2m on bond debt. The movement in
pre-IFRS net debt is not affected by the movement on leases.
Cash flow
H1 2023 H1 2022
£m £m
Underlying operating profit 32.7 42.5
Add back: Depreciation 37.8 36.0
Add back: Amortisation 1.2 1.7
Underlying EBITDA 71.7 80.2
Increase in working capital (27.5) (42.0)
Repayment of lease liabilities (31.8) (31.1)
Capital expenditure (5.7) (6.9)
Cash exceptionals (2.8) (6.6)
Other 1.6 (2.4)
Operating cash flow 5.5 (8.8)
Interest and financing (17.1) (13.9)
Tax (8.7) (8.7)
Free cash flow(1) (20.3) (31.4)
Acquisitions (0.5) (0.9)
Investment in financial assets (1.0) -
Repayment of debt (0.4) (0.2)
Total cash flow (22.2) (32.5)
Cash and cash equivalents at beginning of the period 130.1 145.1
Effect of foreign exchange rate changes (1.6) 0.6
Cash and cash equivalents at end of the period 106.3 113.2
1. Free cash flow represents the cash available after supporting operations,
including capex and the repayment of lease liabilities, and before
acquisitions and any movements in funding.
During the period, the Group reported an improved free cash outflow of £20.3m
(H1 2022: £31.4m outflow) on a year-on-year basis. This improvement was a
result of the lower underlying operating profit in the period being more than
offset by a lower seasonal movement in working capital, a result of continued
discipline in working capital and cash management. Capex during the period
was £5.7m (H1 2022: £6.9m). "Other" included the add back of non-cash
P&L items and provision movements of £0.8m, and proceeds on sale of
property, plant and equipment of £0.8m.
The key factors driving the working capital result in the period were the
usual sales seasonality, lower volumes year-on-year and year-over-year
inflation.
Financing and funding
The Group's debt funding comprises €300m of 5.25% fixed rate senior secured
notes and an RCF of £90m. These mature and expire in November 2026 and May
2026 respectively. The secured notes are subject to incurrence-based
covenants only, and the RCF has a leverage maintenance covenant set at 4.75x
which only applies if the facility is over 40% drawn at a quarter end
reporting date. The RCF was undrawn at 30 June 2023.
The Group's liquidity position remained robust throughout H1 2023, and at the
end of the period stood at £196m, consisting of cash of £106m and the £90m
undrawn RCF noted above. On the basis of current forecasts the Group is
expected to remain in compliance with all banking covenants throughout the
forecast period to 30 September 2024.
Dividend
No interim dividend will be paid for 2023. However, continued successful
execution of the strategy, including sensible investment where appropriate,
will return the Group to sustainable, profitable growth and cash generation,
supporting a range of capital allocation priorities. The Board reiterates
its commitment to reinstating a dividend, appropriately covered by underlying
earnings, once it is appropriate to do so.
Responsibility Statement
We confirm to the best of our knowledge that:
(a) the condensed interim set of financial statements has been prepared in
accordance with UK adopted IAS 34 "Interim Financial Reporting";
(b) the Interim Report includes a fair review of the information required by
DTR 4.2.7R (indication of important events during the first six months and
description of principal risks and uncertainties for the remaining six months
of the year); and
(c) the Interim Report includes a fair review of the information required by
DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
By order of the Board
Gavin Slark Ian Ashton
Director Director
07 August 2023 07 August 2023
Cautionary statement
This Interim Report is prepared for and addressed only to the Company's
Shareholders as a whole and to no other person. The Company, its Directors,
employees, agents or advisors do not accept or assume responsibility to any
other person to whom this Interim Report is shown or into whose hands it may
come and such responsibility or liability is expressly disclaimed.
This Interim Report contains forward-looking statements that are subject to
risk factors including the economic and business circumstances occurring from
time to time in countries and markets in which the Group operates and risk
factors associated with the building and construction sectors. By their
nature, forward-looking statements involve a number of risks, uncertainties
and assumptions because they relate to events and/or depend on circumstances
that may or may not occur in the future and could cause actual results and
outcomes to differ materially from those expressed in or implied by the
forward-looking statements. No assurance can be given that the
forward-looking statements in this Interim Report will be realised.
Statements about the Directors' expectations, beliefs, hopes, plans,
intentions and strategies are inherently subject to change and they are based
on expectations and assumptions as to future events, circumstances and other
factors which are in some cases outside the Group's control. Actual results
could differ materially from the Group's current expectations.
It is believed that the expectations set out in these forward-looking
statements are reasonable but they may be affected by a wide range of
variables which could cause actual results or trends to differ materially,
including but not limited to, market conditions, competitors and margin
management, commercial relationships, fluctuations in product pricing, changes
in foreign exchange and interest rates, government legislation, availability
of funding, working capital and cash management, IT infrastructure and cyber
security and availability and quality of key resources.
The Company's Shareholders are cautioned not to place undue reliance on the
forward-looking statements. This Interim Report has not been audited or
otherwise independently verified. The information contained in this Interim
Report has been prepared on the basis of the knowledge and information
available to Directors at the date of its preparation and the Company does not
undertake any obligation to update or revise this Interim Report during the
financial year ahead.
Condensed Consolidated Income Statement
For the six months ended 30 June 2023 (unaudited)
Six months ended 30 June 2023 Six months ended 30 June 2022 Year ended 31 December 2022
Underlying(1) Other items(2) Total Underlying(1) Other items(2) Total Underlying(1) Other items(2) Total
Note £m £m £m £m £m £m £m £m £m
Revenue 2 1,423.4 - 1,423.4 1,358.5 - 1,358.5 2,744.5 - 2,744.5
Cost of sales (1,058.6) - (1,058.6) (1,002.8) - (1,002.8) (2,033.5) - (2,033.5)
Gross profit 364.8 - 364.8 355.7 - 355.7 711.0 - 711.0
Other operating expenses (327.2) (3.8) (331.0) (306.1) (2.7) (308.8) (614.3) (22.0) (636.3)
Impairment losses on financial assets(3) (4.9) 1.1 (3.8) (7.1) - (7.1) (16.5) (2.0) (18.5)
Operating profit/(loss) 3 32.7 (2.7) 30.0 42.5 (2.7) 39.8 80.2 (24.0) 56.2
Finance income 5 1.4 - 1.4 0.5 - 0.5 1.3 - 1.3
Finance costs 5 (19.1) (0.1) (19.2) (14.1) - (14.1) (29.9) (0.1) (30.0)
Profit/(loss) before tax 15.0 (2.8) 12.2 28.9 (2.7) 26.2 51.6 (24.1) 27.5
Income tax (expense)/credit 6 (8.0) 0.5 (7.5) (10.5) 0.2 (10.3) (14.4) 2.4 (12.0)
Profit/(loss) after tax 7.0 (2.3) 4.7 18.4 (2.5) 15.9 37.2 (21.7) 15.5
Attributable to:
Equity holders of the Company 7.0 (2.3) 4.7 18.4 (2.5) 15.9 37.2 (21.7) 15.5
Earnings per share
Basic 7 0.4p 1.4p 1.3p
Diluted 7 0.4p 1.3p 1.3p
(1) Underlying represents the results before Other items.
(2) Other items have been disclosed separately in order to give an indication
of the underlying earnings of the Group. Further details are disclosed in Note
4.
(3) Impairment losses on financial assets (trade receivables and lease
receivables), as determined in accordance with IFRS 9 Financial Instruments,
previously included in other operating expenses in the period ended 30 June
2022, are shown separately, and the prior year comparative for the period
ended 30 June 2022 has been updated to present on a consistent basis.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2023 (unaudited)
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Profit after tax 4.7 15.9 15.5
Items that will not subsequently be reclassified to the Consolidated Income
Statement:
Remeasurement of defined benefit pension liability (Note 13) 0.1 0.6 (14.3)
Deferred tax movement associated with remeasurement of defined benefit pension - - (0.5)
liability
0.1 0.6 (14.8)
Items that may subsequently be reclassified to the Consolidated Income
Statement:
Exchange difference on retranslation of foreign currency goodwill and (1.5) 1.3 2.7
intangibles
Exchange difference on retranslation of foreign currency net investments (6.3) 3.4 11.5
(excluding goodwill and intangibles)
Exchange and fair value movements associated with borrowings and derivative 8.3 (6.1) (13.9)
financial instruments
Gains and losses on cash flow hedges (1.7) 1.7 1.6
Transfer to profit and loss on cash flow hedges (1.0) - 0.2
(2.2) 0.3 2.1
Other comprehensive (expense)/income (2.1) 0.9 (12.7)
Total comprehensive income 2.6 16.8 2.8
Attributable to:
Equity holders of the Company 2.6 16.8 2.8
Condensed Consolidated Balance Sheet
As at 30 June 2023 (unaudited)
30 June 30 June 31 December
2023 2022 2022
Restated(1)
Note £m £m £m
Non-current assets
Property, plant and equipment 66.6 68.4 68.8
Right-of-use assets 277.1 258.5 265.9
Goodwill 133.3 121.2 134.8
Intangible assets 20.0 12.9 22.8
Lease receivables 2.7 1.4 1.2
Deferred tax assets 4.8 4.0 3.3
Non-current financial assets 11 0.2 0.2 0.4
Retirement benefit surplus 13 - 0.9 -
504.7 467.5 497.2
Current assets
Inventories 290.4 277.7 270.6
Lease receivables 1.0 0.1 0.1
Trade and other receivables 488.1 490.1 432.6
Current tax assets 1.9 0.6 0.9
Current financial assets 11 1.3 1.4 1.6
Cash at bank and on hand 106.3 113.2 130.1
889.0 883.1 835.9
Total assets 1,393.7 1,350.6 1,333.1
Current liabilities
Trade and other payables 483.1 475.3 425.0
Lease liabilities 60.6 54.3 56.5
Interest-bearing loans and borrowings 0.8 - 0.8
Deferred consideration 0.2 1.0 0.7
Other financial liabilities - 0.8 -
Derivative financial instruments 11 1.0 - -
Current tax liabilities 6.9 5.9 5.8
Provisions 7.3 13.6 9.6
559.9 550.9 498.4
Non-current liabilities
Lease liabilities 257.8 236.0 251.2
Interest-bearing loans and borrowings 257.7 256.0 266.1
Deferred consideration 1.8 - 1.8
Derivative financial instruments 11 0.2 - 0.1
Other payables 3.1 3.8 7.4
Retirement benefit obligations 13 21.0 9.0 23.0
Provisions 19.1 15.4 17.3
560.7 520.2 566.9
Total liabilities 1,120.6 1,071.1 1,065.3
Net assets 273.1 279.5 267.8
Capital and reserves
Called up share capital 12 118.2 118.2 118.2
Treasury shares (16.4) (16.4) (16.4)
Capital redemption reserve 0.3 0.3 0.3
Share option reserve 11.3 6.3 8.6
Hedging and translation reserves 2.3 2.7 4.5
Cost of hedging reserve 0.1 0.1 0.1
Merger reserve 92.5 92.5 92.5
Retained profits 64.8 75.8 60.0
Attributable to equity holders of the Company 273.1 279.5 267.8
Total equity 273.1 279.5 267.8
(1 ) The Condensed Consolidated Balance Sheet at 31 December 2022 has been
restated as a result of the finalisation of the acquisition accounting fair
values, as explained in Note 1.
Condensed Consolidated Cash Flow Statement
For the six months ended 30 June 2023 (unaudited)
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
Note £m £m £m
Net cash flow from operating activities
Cash generated from operating activities 9 42.2 32.7 132.3
Income tax paid (8.7) (8.7) (14.3)
Net cash generated from operating activities 33.5 24.0 118.0
Cash flows from investing activities
Finance income received 1.4 0.5 1.3
Purchase of property, plant and equipment and computer software (5.7) (6.9) (14.5)
Initial direct costs of right-of-use assets - - (0.8)
Proceeds from sale of property, plant and equipment 0.8 0.5 0.8
Net cash flow on the purchase of businesses - - (26.0)
Settlement of amounts payable for previous purchases of businesses 8 (0.5) (0.9) (1.3)
Investment in financial assets (1.0) - (0.2)
Net cash used in investing activities (5.0) (6.8) (40.7)
Cash flows from financing activities
Finance costs paid (18.5) (14.4) (30.1)
Repayment of lease liabilities (31.8) (31.1) (60.1)
Repayment of borrowings (0.4) (0.2) (1.4)
Acquisition of treasury shares - (4.0) (4.0)
Net cash used in financing activities (50.7) (49.7) (95.6)
Decrease in cash and cash equivalents in the period 10 (22.2) (32.5) (18.3)
Cash and cash equivalents at beginning of the period 130.1 145.1 145.1
Effect of foreign exchange rate changes (1.6) 0.6 3.3
Cash and cash equivalents at end of the period 106.3 113.2 130.1
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023 (unaudited)
Called up share capital Treasury shares reserve Capital redemption reserve Share option reserve Hedging and translation reserves Cost of hedging reserve Merger reserve Retained profits Total
For the six months ended 30 June 2023 £m £m £m £m £m £m £m £m £m
At 1 January 2023 118.2 (16.4) 0.3 8.6 4.5 0.1 92.5 60.0 267.8
Profit after tax - - - - - - - 4.7 4.7
Other comprehensive (expense)/income - - - - (2.2) - - 0.1 (2.1)
Total comprehensive (expense)/income - - - - (2.2) - - 4.8 2.6
Credit to share option reserve - - - 2.7 - - - - 2.7
At 30 June 2023 118.2 (16.4) 0.3 11.3 2.3 0.1 92.5 64.8 273.1
Treasury shares reserve Capital redemption reserve Share option reserve Hedging and translation reserves Cost of hedging reserve Merger reserve Retained profits Total
Called up share capital
For the six months ended 30 June 2022 £m £m £m £m £m £m £m £m £m
At 1 January 2022 118.2 (12.5) 0.3 4.4 2.4 0.1 92.5 59.3 264.7
Profit after tax - - - - - - - 15.9 15.9
Other comprehensive income - - - - 0.3 - - 0.6 0.9
Total comprehensive income - - - - 0.3 - - 16.5 16.8
Purchase of treasury shares - (4.0) - - - - - - (4.0)
Credit to share option reserve - - - 2.0 - - - - 2.0
Settlement of share options - 0.1 - (0.1) - - - - -
At 30 June 2022 118.2 (16.4) 0.3 6.3 2.7 0.1 92.5 75.8 279.5
Called up share capital Treasury shares reserve Capital redemption reserve Share option reserve Hedging and translation reserves Cost of hedging reserve Merger reserve Retained (losses)/ profits Total
For the year ended 31 December 2022 £m £m £m £m £m £m £m £m £m
At 1 January 2022 118.2 (12.5) 0.3 4.4 2.4 0.1 92.5 59.3 264.7
Profit after tax - - - - - - - 15.5 15.5
Other comprehensive income/(expense) - - - - 2.1 - - (14.8) (12.7)
Total comprehensive income - - - - 2.1 - - 0.7 2.8
Purchase of treasury shares - (4.0) - - - - - - (4.0)
Credit to share option reserve - - - 4.4 - - - - 4.4
Settlement of share options - 0.1 - (0.2) - - - - (0.1)
At 31 December 2022 118.2 (16.4) 0.3 8.6 4.5 0.1 92.5 60.0 267.8
The share option reserve represents the cumulative equity-settled share option
charge under IFRS 2 "Share-based payment" less the value of any share options
that have been exercised.
The hedging and translation reserves represent movements in the Condensed
Consolidated Balance Sheet as a result of movements in exchange rates and
movements in the fair value of cash flow hedges which are taken directly to
reserves.
Notes to the Condensed Interim Financial Statements
1. Basis of preparation of Condensed Interim Financial Statements
The Condensed Interim Financial Statements were approved by the Board of
Directors on 7 August 2023.
The Group's Condensed Interim Financial Statements have been prepared in
accordance with UK adopted IAS 34 "Interim Financial Reporting" and the
accounting policies included in the Annual Report and Accounts for the year
ended 31 December 2022, which have been applied consistently throughout the
current and preceding periods.
The Condensed Interim Financial Statements do not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The interim
results to 30 June 2023 and 30 June 2022 have been subject to an Interim
Review in accordance with ISRE 2410 by the Company's Auditor.
The financial information for the full preceding year is based on the audited
statutory accounts for the financial year ended 31 December 2022 prepared in
accordance with UK adopted international accounting standards. Those accounts
have been delivered to the Registrar of Companies. The Auditor's Report was
(i) unqualified, (ii) included no matters to which the auditor drew attention
by way of emphasis without modifying their report and (iii) did not contain
statements under Section 498(2) or Section 498(3) of the Companies Act 2006 in
relation to the financial statements.
The preparation of condensed interim financial statements requires management
to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may subsequently differ from those estimates. The
areas of critical accounting judgements and key sources of estimation
uncertainty set out on page 149 to 150 of the 2022 Annual Report and Accounts
are considered to continue and be consistently applied.
Restatement of 2022 Consolidated Balance Sheet
The fair values of the identifiable assets and liabilities acquired in
relation to the acquisition of Miers Construction Products Limited in 2022
have been finalised during the period. This resulted in a decrease in the
current tax asset of £0.3m, an increase in the current tax liability of
£0.3m and a corresponding increase in the goodwill recognised of £0.6m (see
Note 8). This has been accounted for retrospectively and the Condensed
Consolidated Balance Sheet at 31 December 2022 has been restated to reflect
this. This had no impact on profit or loss, cash flows or net assets for the
year ended or as at 31 December 2022.
Going concern
The Directors have considered the Group's forecasts which support the view
that the Group will be able to continue to operate within its banking
facilities and comply with its banking covenants for the period to 30
September 2024. The Group has committed facilities in place to November 2026
(senior secured notes) and a revolving credit facility (RCF) until May 2026.
The senior secured notes are subject to incurrence based covenants only, and
the RCF has a leverage maintenance covenant which is only effective if the
facility is over 40% drawn at a quarter end reporting date. The RCF was
undrawn as at 30 June 2023.
The Directors have considered the principal risks and uncertainties that could
potentially impact the Group's ability to fund its future activities and
adhere to its banking covenants, including:
· High levels of inflation, and current economic and political
uncertainties, potentially impacting market demand;
· Potentially recessionary conditions in the coming year; and
· Material shortages impacting our ability to meet demand and hence
having an impact on forecast sales.
The forecasts on which the going concern assessment is based have been subject
to sensitivity analysis and stress testing to assess the impact of the above
risks and the Directors have also reviewed mitigating actions that could be
taken. Under a scenario including a combination of the above, resulting in a
66% reduction in underlying operating profit from the base forecast for the
going concern period, the analysis shows that sufficient cash would be
available without triggering a covenant breach.
The Directors have considered the impact of climate related matters on the
going concern assessment and this is not expected to have a significant impact
on the Group's going concern assessment to 30 September 2024.
On consideration of the above the Directors believe that the Group has
adequate resources to continue in operational existence for the forecast
period to 30 September 2024 and the Directors therefore consider it
appropriate to continue to adopt the going concern basis in preparing the 2023
Condensed Interim Financial Statements.
New standards, interpretations and amendments adopted by the Group
Several amendments apply for the first time in 2023 but do not have an impact
on the Condensed Interim Financial Statements of the Group. The Group has
adopted the Amendments to IAS12 "International Tax Reform: Pillar Two Model
Rules" issued in May 2023 and has applied the temporary mandatory exception
from recognising and disclosing information about deferred tax assets and
liabilities related to Pillar Two income taxes. The Group has not early
adopted any standard, interpretation or amendment that has been issued but is
not yet effective.
2. Revenue from contracts with customers
The Group's revenue is analysed by type and nature as follows:
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Eliminations Total Group
Total Total
Six months ended 30 June 2023 £m £m £m £m £m £m £m £m £m £m £m £m
Type of product
Interiors 381.6 - 381.6 116.4 - 116.4 234.8 62.1 30.5 110.2 - 935.6
Exteriors - 221.1 221.1 - 249.7 249.7 - - 17.0 - - 487.8
Inter-segment revenue(1) 3.3 1.1 4.4 - 7.7 7.7 - - - - (12.1) -
Total underlying and statutory revenue 384.9 222.2 607.1 116.4 257.4 373.8 234.8 62.1 47.5 110.2 (12.1) 1,423.4
Nature of revenue
Goods for resale 384.9 222.2 607.1 116.4 257.4 373.8 234.8 62.1 44.9 110.2 (12.1) 1,420.8
(recognised at point in time)
Construction contracts - - - - - - - - 2.6 - - 2.6
(recognised over time)
Total 384.9 222.2 607.1 116.4 257.4 373.8 234.8 62.1 47.5 110.2 (12.1) 1,423.4
(1) Inter-segment revenue is charged at the prevailing market rates.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Eliminations Total Group
Total Total
Six months ended 30 June 2022 £m £m £m £m £m £m £m £m £m £m £m £m
Type of product
Interiors 331.9 - 331.9 111.2 - 111.2 224.5 56.1 34.6 115.1 - 873.4
Exteriors - 224.0 224.0 - 239.8 239.8 - - 21.3 - - 485.1
Inter-segment revenue(1) 3.0 1.7 4.7 0.1 3.9 4.0 - - - - (8.7) -
Total underlying and statutory revenue 334.9 225.7 560.6 111.3 243.7 355.0 224.5 56.1 55.9 115.1 (8.7) 1,358.5
Nature of revenue
Goods for resale 334.9 225.7 560.6 111.3 243.7 355.0 224.5 56.1 53.3 115.1 (8.7) 1,355.9
(recognised at point in time)
Construction contracts - - - - - - - - 2.6 - - 2.6
(recognised over time)
Total 334.9 225.7 560.6 111.3 243.7 355.0 224.5 56.1 55.9 115.1 (8.7) 1,358.5
(1) Inter-segment revenue is charged at the prevailing market rates.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Eliminations Total Group
Total Total
Year ended 31 December 2022 £m £m £m £m £m £m £m £m £m £m £m £m
Type of product
Interiors 702.6 - 702.6 218.4 - 218.4 457.8 115.9 66.7 230.7 - 1,792.1
Exteriors - 445.2 445.2 - 465.6 465.6 - - 41.6 - - 952.4
Inter-segment revenue(1) 5.5 2.7 8.2 0.1 9.7 9.8 0.1 - - 0.1 (18.2) -
Total underlying and statutory revenue 708.1 447.9 1,156.0 218.5 475.3 693.8 457.9 115.9 108.3 230.8 (18.2) 2,744.5
Nature of revenue
Goods for resale 708.1 447.9 1,156.0 218.5 475.3 693.8 457.9 115.9 102.6 230.8 (18.2) 2,738.8
(recognised at point in time)
Construction contracts - - - - - - - - 5.7 - - 5.7
(recognised over time)
Total 708.1 447.9 1,156.0 218.5 475.3 693.8 457.9 115.9 108.3 230.8 (18.2) 2,744.5
(1) Inter-segment revenue is charged at the prevailing market rates.
3. Segmental information
In accordance with IFRS 8 "Operating Segments", the Group identifies its
reportable operating segments based on the way in which financial information
is reviewed and business performance is assessed by the Chief Operating
Decision Maker (CODM). Reportable operating segments are grouped on a
geographical basis.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Eliminations Total Group
Total Total
Six months ended 30 June 2023 £m £m £m £m £m £m £m £m £m £m £m £m
Revenue
Underlying and statutory revenue 381.6 221.1 602.7 116.4 249.7 366.1 234.8 62.1 47.5 110.2 - 1,423.4
Inter-segment revenue(1) 3.3 1.1 4.4 - 7.7 7.7 - - - - (12.1) -
Total revenue 384.9 222.2 607.1 116.4 257.4 373.8 234.8 62.1 47.5 110.2 (12.1) 1,423.4
Segment result before Other items 6.6 6.0 12.6 6.4 12.1 18.5 9.6 (1.6) 0.5 2.7 - 42.3
Amortisation of acquired intangibles (1.2) (0.3) (1.5) - - - (0.1) - - - - (1.6)
Acquisition costs (1.4) - (1.4) - - - - - - - - (1.4)
Cloud computing configuration and customisation costs - - - - (0.3) (0.3) - (1.0) - - - (1.3)
Other specific items 0.8 0.3 1.1 - (0.1) (0.1) - 0.8 - - - 1.8
Segment operating profit/(loss) 4.8 6.0 10.8 6.4 11.7 18.1 9.5 (1.8) 0.5 2.7 - 39.8
Parent company costs (9.6)
Parent company Other items(2) (0.2)
Operating profit 30.0
Net finance costs before Other items (17.7)
Non-underlying finance costs (0.1)
Profit before tax 12.2
Income tax expense (7.5)
Profit for the period 4.7
(1) Inter-segment revenue is charged at the prevailing market rates.
(2) Parent company Other items relates to onerous contract costs. See Note 4
for further details.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Eliminations Total Group
Total Total
Six months ended 30 June 2022 £m £m £m £m £m £m £m £m £m £m £m £m
Revenue
Underlying and statutory revenue 331.9 224.0 555.9 111.2 239.8 351.0 224.5 56.1 55.9 115.1 - 1,358.5
Inter-segment revenue(1) 3.0 1.7 4.7 0.1 3.9 4.0 - - - - (8.7) -
Total revenue 334.9 225.7 560.6 111.3 243.7 355.0 224.5 56.1 55.9 115.1 (8.7) 1,358.5
Result
Segment result before Other items 3.8 11.1 14.9 7.4 15.3 22.7 8.3 (1.7) 3.0 5.9 - 53.1
Amortisation of acquired intangibles (0.4) (1.8) (2.2) - (0.2) (0.2) - - - - - (2.4)
Acquisition costs (0.2) - (0.2) - - - - - - - - (0.2)
Cloud computing configuration and customisation costs - - - - (0.8) (0.8) - - - - - (0.8)
Other specific items 0.3 0.2 0.5 - - - - - - - - 0.5
Segment operating profit/(loss) 3.5 9.5 13.0 7.4 14.3 21.7 8.3 (1.7) 3.0 5.9 - 50.2
Parent company costs (10.6)
Parent company Other items(2) 0.2
Operating profit 39.8
Net finance costs (13.6)
Profit before tax 26.2
Income tax expense (10.3)
Profit for the period 15.9
(1) Inter-segment revenue is charged at the prevailing market rates.
(2) Parent company Other items relates to other specific items £0.2m
(credit), included within the total other specific items of £0.7m discussed
in more detail in Note 4.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Eliminations Total Group
Total Total
Year ended 31 December 2022 £m £m £m £m £m £m £m £m £m £m £m £m
Revenue
Underlying and statutory revenue 702.6 445.2 1,147.8 218.4 465.6 684.0 457.8 115.9 108.3 230.7 - 2,744.5
Inter-segment revenue(1) 5.5 2.7 8.2 0.1 9.7 9.8 0.1 - - 0.1 (18.2) -
Total revenue 708.1 447.9 1,156.0 218.5 475.3 693.8 457.9 115.9 108.3 230.8 (18.2) 2,744.5
Segment result before Other items 14.3 18.4 32.7 12.2 23.6 35.8 16.8 (3.0) 6.0 10.6 - 98.9
Amortisation of acquired intangibles (1.4) (3.2) (4.6) - (0.2) (0.2) 0.1 - - - - (4.7)
Impairment charges - - - - - - - (15.8) - - - (15.8)
Acquisition costs (2.2) - (2.2) (0.2) - (0.2) (0.1) - - - - (2.5)
Cloud computing configuration and customisation costs - - - (2.0) - (2.0) - (0.7) - - - (2.7)
Net restructuring costs - - - - - - - (0.4) - - - (0.4)
Other specific items 1.0 - 1.0 - - - - - - - - 1.0
Segment operating profit/(loss) 11.7 15.2 26.9 10.0 23.4 33.4 16.8 (19.9) 6.0 10.6 - 73.8
Parent company costs (18.7)
Parent company Other items(2) 1.1
Operating profit 56.2
Net finance costs before Other items (28.6)
Non-underlying finance costs (0.1)
Profit before tax 27.5
Income tax expense (12.0)
Profit for the period 15.5
(1) Inter-segment revenue is charged at the prevailing market rates.
(2) Parent Company Other items include costs associated with refinancing
£0.4m, offset by credits relating to onerous contracts £1.2m and other
specific items £0.3m. See Note 4 for further details.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Total Group
Total Total
30 June 2023 £m £m £m £m £m £m £m £m £m £m £m
Assets
Segment assets 327.2 293.9 621.1 81.1 266.8 347.9 161.4 47.1 53.0 89.9 1,320.4
Unallocated assets:
Property, plant and equipment 0.8
Derivative financial instruments 0.3
Cash and cash equivalents 66.1
Other assets 6.1
Consolidated total assets 1,393.7
Liabilities
Segment liabilities 280.7 143.1 423.8 75.8 158.3 234.1 95.1 25.6 27.8 45.6 852.0
Unallocated liabilities:
Interest-bearing loans and borrowings 256.0
Derivative financial instruments 1.2
Other liabilities 11.4
Consolidated total liabilities 1,120.6
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Total Group
Total Total
30 June 2022 £m £m £m £m £m £m £m £m £m £m £m
Assets
Segment assets 268.2 272.5 540.7 82.2 251.3 333.5 159.4 65.5 63.4 80.1 1,242.6
Unallocated assets:
Property, plant and equipment 0.6
Derivative financial instruments 1.4
Cash and cash equivalents 101.4
Other assets 4.6
Consolidated total assets 1,350.6
Liabilities
Segment liabilities 243.9 132.2 376.1 69.9 151.0 220.9 91.3 28.1 36.4 43.1 795.9
Unallocated liabilities:
Interest-bearing loans and borrowings 256.0
Other liabilities 19.2
Consolidated total liabilities 1,071.1
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Total Group
Total Total
31 December 2022 £m £m £m £m £m £m £m £m £m £m £m
Assets
Segment assets 287.7 271.9 559.6 81.4 255.2 336.6 150.8 46.7 57.8 82.7 1,234.2
Unallocated assets:
Property, plant and equipment 0.9
Derivative financial instruments 1.8
Cash and cash equivalents 91.1
Other assets 5.1
Consolidated total assets 1,333.1
Liabilities
Segment liabilities 244.2 128.2 372.4 74.4 160.2 234.6 84.3 25.2 31.2 41.4 789.1
Unallocated liabilities:
Interest-bearing loans and borrowings 264.0
Derivative financial instruments 0.1
Other liabilities 12.1
Consolidated total liabilities 1,065.3
4. Other items
Profit/(loss) after tax includes the following Other items which have been
disclosed in a separate column within the Condensed Consolidated Income
Statement in order to provide a better indication of the underlying earnings
of the Group:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Amortisation of acquired intangibles (1.6) (2.4) (4.7)
Impairment charges - - (15.8)
Costs related to acquisitions (Note 8) (1.4) (0.2) (2.5)
Cloud computing configuration and customisation costs (1.3) (0.8) (2.7)
Onerous contract costs (0.2) - 1.2
Costs associated with refinancing - - (0.4)
Net restructuring costs - - (0.4)
Other specific items(1 ) 1.8 0.7 1.3
Impact on operating profit/(loss) (2.7) (2.7) (24.0)
Non-underlying finance costs (0.1) - (0.1)
Impact on profit/(loss) before tax (2.8) (2.7) (24.1)
Income tax credit on Other items 0.5 0.2 2.4
Impact on profit/(loss) after tax (2.3) (2.5) (21.7)
(1) Other specific items principally relates to the reversal of impairment of
lease receivables (£1.1m) and gains on the sublease and termination of
property leases which were previously impaired (£0.8m). Amounts in the
previous periods to 30 June 2022 and 31 December 2022 related principally to
the settlement and/or release of certain historic provisions, including
amounts relating to businesses divested in previous years, and provision for
impairment of lease receivables.
5. Finance income and finance costs
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Finance income
Interest on bank deposits 1.4 0.5 1.3
1.4 0.5 1.3
Finance costs
On bank loans, overdrafts and other associated items(1) 2.7 1.0 2.6
On senior secured notes(2) 6.9 6.9 14.0
On obligations under lease contracts 9.2 6.2 13.3
Net finance charge on defined benefit schemes 0.3 - -
Total interest expense before Other items 19.1 14.1 29.9
Non-underlying finance costs 0.1 - 0.1
Total finance costs 19.2 14.1 30.0
Net finance costs 17.8 13.6 28.7
(1) Other associated items includes the amortisation of arrangement fees of
£0.1m (30 June 2022: £0.1m; 31 December 2022: £0.1m).
(2) Included within finance costs on the senior secured notes is the
amortisation of arrangement fees of £0.3m (30 June 2022: £0.3m; 31 December
2022: £0.5m).
6. Income tax
The income tax expense comprises:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Total income tax expense for the period 7.5 10.3 12.0
Tax for the six month period ended 30 June 2023 is determined based on
applying full year estimates of the annual effective tax rate for individual
jurisdictions to the underlying profit before tax for the six month period.
This results in a tax charge of 53.3% on underlying profit before tax (30 June
2022: 36.3%; 31 December 2022: 27.9%).
Tax losses cannot be surrendered or utilised cross border, and the Group is
therefore subject to tax in some countries and not in others. Tax losses in
the UK and Benelux businesses are not currently recognised as deferred tax
assets, which impacts the overall effective tax rate. The relative proportions
of these losses compared to the total Group underlying profit before tax is
also higher for the six months to 30 June 2023 compared to prior periods, and
the combination of these factors has led to the increase in the overall
average effective tax rate in the current period.
7. Earnings per share
The calculations of earnings per share are based on the following profits and
numbers of shares:
Basic and diluted
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Profit attributable to ordinary equity holders of the parent for basic and 4.7 15.9 15.5
diluted earnings per share
Add back:
Other items (see Note 4) 2.3 2.5 21.7
Profit attributable to ordinary equity holders of the parent for basic and 7.0 18.4 37.2
diluted earnings per share before other items
Weighted average number of shares
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
Number Number Number
For basic and diluted earnings per share 1,147,679,200 1,151,936,602 1,149,776,931
Effect of dilution from share options 42,844,844 31,375,439 33,638,307
Adjusted for the effect of dilution 1,190,524,044 1,183,312,041 1,183,415,238
Earnings per share
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
Earnings per share
Basic earnings per share 0.4p 1.4p 1.3p
Diluted earnings per share 0.4p 1.3p 1.3p
Earnings per share before Other items(1)
Basic and diluted earnings per share before Other items 0.6p 1.6p 3.2p
(1) Earnings per share before Other items (also referred to as underlying
earnings per share) has been disclosed in order to present the underlying
performance of the Group.
8. Acquisitions
There were no acquisitions during the six months to 30 June 2023. In the
second half of the prior year the Group acquired Thermodämm GmbH
("Thermodämm") and Miers Construction Products Limited ("Miers").
Thermodämm is a distributor of interiors and insulation products and is
allocated to the Germany segment. It was acquired for total consideration of
£3.6m.
Miers is a distributor of specialist construction materials and is allocated
to the UK Interiors segment. It was acquired for total consideration of
£31.2m, comprising £26.9m cash paid on completion, £1.8m deferred and
payable in July 2024 and up to £2.6m contingent consideration. The contingent
consideration is payable dependent on future performance of the business based
on adjusted EBITDA exceeding an EBITDA threshold, as defined in the sale and
purchase agreement, for the financial year to 31 December 2023. The range of
contingent consideration payable is therefore £nil to £2.6m, with £2.5m
recognised at the date of acquisition and at 30 June 2023 on the basis of
current forecasts and fair value calculation. This is included within other
payables in current liabilities on the Condensed Consolidated Balance Sheet at
30 June 2023. The liability is remeasured to fair value at subsequent
reporting dates with changes in fair value recognised in profit or loss. A
further amount of up to £4.0m is also payable in 2024 dependant on the future
performance of the business for the financial year to 31 December 2023 and
dependent on the vendors remaining within the business. This is therefore
treated as remuneration and is being charged to the Condensed Consolidated
Income Statement as earned. £1.2m was recognised and included within other
payables at 31 December 2022, with a further £1.4m recognised in the six
months to 30 June 2023.
Analysis of cash flows on acquisition
Year ended 31 December 2022
Miers Thermodämm Total
£m £m £m
Consideration paid (included in cash flows from investing activities) (26.9) (3.4) (30.3)
Net cash acquired with the subsidiary (included in cash flows from investing 4.1 0.2 4.3
activities)
Total net cash flow included in cash flows from investing activities (22.8) (3.2) (26.0)
Transaction costs (included in cash flows from operating activities) (0.8) (0.1) (0.9)
Net cash flow on acquisition (23.6) (3.3) (26.9)
The fair values of the identifiable assets and liabilities of the acquisitions
at the date of acquisition have been finalised during the period. This
resulted in a decrease in the current tax asset of £0.3m, an increase in the
current tax liability of £0.3m and a corresponding increase in the goodwill
recognised of £0.6m in relation to the Miers acquisition. The final balances
on acquisition are as follows:
Year ended Year ended Year ended
31 December 2022 Restated 31 December 2022 31 December 2022 Restated
Miers Thermodämm Total
£m £m £m
Assets
Intangible assets (customer relationships) 12.0 1.7 13.7
Property, plant and equipment 0.8 0.2 1.0
Right-of-use asset 2.7 0.6 3.3
Cash and cash equivalents 4.1 0.2 4.3
Trade and other receivables 13.0 0.3 13.3
Inventories 7.3 0.6 7.9
39.9 3.6 43.5
Liabilities
Trade and other payables (12.2) (0.6) (12.8)
Provisions (1.1) - (1.1)
Current tax liability (0.3) - (0.3)
Deferred tax liability (3.0) (0.7) (3.7)
Bank loan (3.2) - (3.2)
Lease liability (2.7) (0.7) (3.4)
(22.5) (2.0) (24.5)
Total identifiable net assets at fair value 17.4 1.6 19.0
Goodwill arising on acquisition 13.8 2.0 15.8
Purchase consideration transferred 31.2 3.6 34.8
Deferred consideration
A reconciliation of the movement in deferred consideration is provided below:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Liability at 1 January 2.5 1.8 1.8
Liability arising on acquisitions in the year - - 2.0
Amounts paid relating to previous acquisitions (included within cash flow from (0.5) (0.9) (1.3)
investing activities)
Liability at the end of the period 2.0 1.0 2.5
Included in current liabilities 0.2 1.0 0.7
Included in non-current liabilities 1.8 - 1.8
Total 2.0 1.0 2.5
Contingent consideration
A reconciliation of the movement in the fair value measurement of contingent
consideration is provided below:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Liability at 1 January 3.0 0.5 0.5
Liability arising on acquisitions in the year - - 2.5
Liability at the end of the period 3.0 0.5 3.0
Included in current liabilities 3.0 - 0.5
Included in non-current liabilities - 0.5 2.5
Total 3.0 0.5 3.0
Consideration dependent on vendors remaining within the business
Amounts which may be paid to vendors of recent acquisitions who are employed
by the Group and are contingent upon the vendors remaining within the business
are, as required by IFRS3 'Business Combinations', treated as remuneration and
charged to the consolidated income statement as earned. A reconciliation of
the movement in amounts accrued is as follows:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Liability at 1 January 1.2 0.6 0.6
New amounts accrued 1.4 0.2 1.4
Amounts paid (included within cash flows from operating activities) - (0.8) (0.8)
Liability at the end of the period 2.6 - 1.2
Included in current liabilities 2.6 - -
Included in non-current liabilities - - 1.2
Total 2.6 - 1.2
9. Reconciliation of operating profit to cash generated from operating
activities
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Profit before tax 12.2 26.2 27.5
Net finance costs 17.8 13.6 28.7
Depreciation of property, plant and equipment 6.5 6.1 12.6
Depreciation of right-of-use assets 31.3 29.9 60.6
Amortisation of computer software 1.2 1.7 3.2
Amortisation of acquired intangibles 1.6 2.4 4.7
Impairment of property, plant and equipment 0.2 - 2.5
Impairment of goodwill - - 3.6
(Reversal of impairment)/impairment of right-of-use asset (0.3) - 9.7
(Reversal of impairment)/impairment of lease receivable (1.1) 2.0 2.0
Gain on lease transactions (0.9) - -
Profit on sale of property, plant and equipment (0.4) (0.2) (0.4)
Share-based payments 2.7 2.0 4.4
Net foreign exchange differences - (0.3) (1.0)
Decrease in provisions (2.5) (7.3) (11.4)
Working capital movements (26.1) (43.4) (14.4)
Cash generated from operating activities 42.2 32.7 132.3
10. Reconciliation of net cash flow to movements in net debt
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Decrease in cash and cash equivalents in the period (22.2) (32.5) (18.3)
Net cash outflow from repayment of leases and other debt(1) 43.0 38.4 76.1
Decrease in net debt resulting from cash flows 20.8 5.9 57.8
Deferred consideration added on acquisitions - - (2.0)
Debt added on acquisitions - - (6.6)
Non-cash movement in lease liabilities and lease receivables (53.7) (65.7) (111.3)
Other non-cash items(2) (2.8) 1.5 1.4
Exchange differences 10.9 (8.5) (18.3)
Increase in net debt in the period (24.8) (66.8) (79.0)
Net debt at beginning of period (444.0) (365.0) (365.0)
Net debt at end of the period (468.8) (431.8) (444.0)
(1) Including interest element of lease payments.
(2) Other non-cash items include the fair value movement of debt recognised in
the year which does not give rise to a cash inflow or outflow.
Net debt is defined as follows:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Non-current assets:
Derivative financial instruments - 0.2 0.2
Lease receivables 2.7 1.4 1.2
Current assets:
Derivative financial instruments 0.3 1.4 1.6
Lease receivables 1.0 0.1 0.1
Other current financial assets 1.0 - -
Cash at bank and on hand 106.3 113.2 130.1
Current liabilities:
Lease liabilities (60.6) (54.3) (56.5)
Interest bearing loans and borrowings (0.8) - (0.8)
Deferred consideration (0.2) (1.0) (0.7)
Other financial liabilities - (0.8) -
Derivative financial instruments (1.0) - -
Non-current liabilities:
Lease liabilities (257.8) (236.0) (251.2)
Interest-bearing loans and borrowings (257.7) (256.0) (266.1)
Deferred consideration (1.8) - (1.8)
Derivative financial instruments (0.2) - (0.1)
(468.8) (431.8) (444.0)
Analysis of movements in net debt:
At 31 December 2022 Cash flows Non-cash items(1) Exchange differences At 30 June 2023
£m £m £m £m
Cash at bank and on hand 130.1 (22.2) - (1.6) 106.3
Lease receivables 1.3 (0.2) 2.6 - 3.7
Other current financial assets - 1.0 - - 1.0
131.4 (21.4) 2.6 (1.6) 111.0
Liabilities arising from financing activities
Financial assets - derivative financial instruments 1.8 - (1.5) - 0.3
Debts due within one year (1.5) 0.9 (1.4) - (2.0)
Debts due after one year (268.0) - 0.1 8.2 (259.7)
Lease liabilities (307.7) 41.3 (56.3) 4.3 (318.4)
(575.4) 42.2 (59.1) 12.5 (579.8)
Net debt (444.0) 20.8 (56.5) 10.9 (468.8)
(1) Non-cash items include the fair value movement of debt recognised in the
year which does not give rise to a cash inflow or outflow, movements between
debts due within one year and after one year, and non-cash movements in
relation to lease liabilities and lease receivables.
11. Financial instruments fair value disclosures
At the balance sheet date the Group held the following financial instruments
at fair value:
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Financial assets
Unquoted equity investment 0.2 - 0.2
Derivative financial instruments 0.3 1.6 1.8
Other current financial assets 1.0 - -
1.5 1.6 2.0
Financial liabilities
Derivative financial instruments 1.2 - 0.1
Contingent consideration (included within other payables) 3.0 0.5 3.0
4.2 0.5 3.1
The derivative financial instruments above all have fair values which are
calculated by reference to observable inputs (i.e. classified as level 2 in
the fair value hierarchy). The fair values of these derivative financial
instruments, adjusted for credit risk, are calculated by discounting the
associated future cash flows to net present values using appropriate market
rates prevailing at the balance sheet date. The fair value of the contingent
consideration is measured using level 3 inputs and the discounting of forecast
future cash flows.
The carrying value of financial assets and liabilities that are recorded at
amortised cost in the accounts is approximately equal to their fair value.
12. Called up share capital
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Authorised
1,390,000,000 ordinary shares of 10p each (30 June and 31 December 2022: 139.0 139.0 139.0
1,390,000,000)
Allotted, called up and fully paid:
1,181,556,977 ordinary shares of 10p each (30 June and 31 December 2022: 118.2 118.2 118.2
1,181,556,977)
The Company has one class of ordinary share which carries no right to fixed
income. The Company did not allot any shares during the period (30 June 2022
and 31 December 2022: nil).
13. Retirement benefit schemes
Defined benefit schemes
The Group operates a number of pension schemes, four of which provide defined
benefits based upon pensionable salary. One of these schemes has assets held
in a separate trustee administered fund, and three are overseas book reserve
schemes. The UK defined benefit pension scheme obligation is calculated on a
year to date basis, using the latest triennial valuation as at 31 December
2019.
The IAS 19 valuation conducted as at 31 December 2022 has been updated to
reflect current market conditions, and as a result an actuarial gain of £0.1m
has been recognised within the Condensed Consolidated Statement of
Comprehensive Income. The total net pension liability in relation to defined
benefit schemes at 30 June 2023 is £21.0m (30 June 2022: £8.1m; 31 December
2022: £23.0m), including £13.5m deficit in the UK scheme. The movement in
the period relates principally to the actuarial gain of £0.1m together with
the scheduled annual contribution in the UK of £2.5m.
14. Interim dividend
No interim dividend is declared for the period (30 June 2022 and 31 December
2022: £nil). In accordance with IAS 10 "Events After the Balance Sheet Date",
dividends declared after the balance sheet date are not recognised as a
liability in the financial statements. There was no final dividend for the
year ended 31 December 2022.
15. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and have therefore not been
disclosed.
In the period to 30 June 2023, the Group incurred expenses of £0.2m (30 June
2022: £0.2m; 31 December 2022: £0.2m) on behalf of the SIG plc Retirement
Benefits Plan, the UK defined benefit pension scheme.
The Group has not identified any other related party transactions in the six
month period to 30 June 2023.
16. Principal risks and uncertainties
The Directors consider that the principal risks and uncertainties which could
have a material impact upon the Group's performance over the remaining six
months of the 2023 financial year remain consistent with those set out in the
Strategic Report on pages 56 to 61 of the Group's 2022 Annual Report and
Accounts. These risks and uncertainties include, but are not limited to:
(1) cyber security;
(2) health and safety;
(3) macroeconomic uncertainty;
(4) ability to attract, recruit and retain our people;
(5) data quality and governance;
(6) environmental, social and governance;
(7) mergers and acquisitions;
(8) legal or regulatory compliance;
(9) digitalisation; and
(10) change management.
The primary risks affecting the Group's performance for the remaining six
months of the year are the risks arising from macro-economic uncertainty and
impact of continued high inflation rates on the level of market demand in the
markets in which SIG operates. SIG's diverse market sectors are affected by
macroeconomic factors which limit visibility and therefore render the short to
medium-term outlook difficult to predict. The "Group outlook" section of the
Trading Review details the current assessment of the markets in which the
Group operates.
17. Contingent liabilities
Legal claim:
At 31 December 2022 the Group disclosed a contingent liability in relation to
legal proceedings being brought against two of the Group's subsidiaries in
Benelux. The claim has been settled subsequent to the period end date and the
contingent liability no longer exists.
Other:
As at the balance sheet date, the Group had outstanding obligations under
customer guarantees, claims, standby letters of credit and discounted bills of
up to £13.3m (30 June 2022: £10.5m; 31 December 2022: £11.7m). Of this
amount, £6.1m (30 June 2022: £4.7m; 31 December 2022: £5.2m) relates to a
standby letter of credit issued by HSBC Bank plc in respect of the Group's
insurance arrangements.
As part of the disposal of Building Plastics in 2017 a guarantee was provided
to the landlord of the leasehold properties transferred with the business
covering rentals over the remaining term of the leases in the event that the
acquiring company enters into administration before the end of the lease term.
The maximum liability that could arise from this would be approximately £0.7m
based on the remaining future rent commitment at 30 June 2023. No provision
has been made in these financial statements as it is not considered likely
that any loss will be incurred in connection with this.
18. Seasonality
The Group's operations are not normally affected by significant seasonal
variations between the first and second halves of the calendar year. In 2022,
the period to 30 June accounted for 49.5% of the Group's underlying annual
revenue. The "Outlook" section of the Operational Review details the current
assessment of the expected second half performance for 2023.
Non-statutory information
The Group uses a variety of alternative performance measures, which are
non-IFRS, to describe the Group's performance. The Group considers these
performance measures to provide useful historical financial information to
help investors evaluate the underlying performance of the business.
Alternative performance measures are not a substitute for or superior to
statutory IFRS measures.
These measures, as shown below, are used to improve the comparability of
information between reporting periods and geographical units and to adjust for
Other items. This also reflects how the business is managed and measured on a
day-to-day basis.
a) Net debt
Net debt is a key metric for the Group, and monitoring it is an important
element of treasury risk management for the Group. Net debt excluding the
impact of IFRS 16 is no longer relevant for financial covenant purposes but is
still monitored for comparative purposes.
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Reported net debt 468.8 431.8 444.0
Lease liabilities recognised in accordance with IFRS 16 (296.3) (268.1) (285.0)
Lease receivables recognised in accordance with IFRS 16 3.7 1.5 1.3
Other financial liabilities recognised in accordance with IFRS 16 - (0.8) -
Net debt excluding impact of IFRS 16 176.2 164.4 160.3
b) Leverage
Leverage is one of the covenants applicable to the Revolving Credit Facility
and is used as a key performance metric for the Group. It is calculated as net
debt divided by the last twelve months underlying EBITDA.
Twelve months ended Twelve months ended
30 June 2023 30 June 2022
£m £m
Underlying operating profit 70.4 70.0
Add back:
Depreciation of right-of-use assets and property, plant and equipment 75.0 71.2
Amortisation of computer software 2.7 3.2
Underlying EBITDA 148.1 144.4
Reported net debt 468.8 431.8
Leverage 3.2x 3.0x
Leverage excluding the impact of IFRS 16 is as follows:
Twelve months ended Twelve months ended
30 June 2023 30 June 2022
£m £m
Underlying operating profit 70.4 70.0
Impact of IFRS 16 (11.6) (4.8)
Underlying operating profit excluding impact of IFRS 16 58.8 65.2
Add back:
Depreciation excluding impact of IFRS 16 13.0 11.1
Amortisation of computer software 2.7 3.2
Underlying EBITDA 74.5 79.5
Net debt excluding the impact of IFRS 16 176.2 164.4
Leverage excluding the impact of IFRS 16 2.4x 2.1x
c) Operating margin
This is used to enhance understanding and comparability of the underlying
financial performance of the Group and is calculated as underlying operating
profit as a percentage of underlying revenue.
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Underlying revenue 1,423.4 1,358.5 2,744.5
Underlying operating profit 32.7 42.5 80.2
Operating margin 2.3% 3.1% 2.9%
d) Free cash flow
Free cash flow represents the cash available after supporting operations,
including capital expenditure and the repayment of lease liabilities, and
before acquisitions and any movements in funding. Operating cash flow
represents free cash flow before interest, financing, costs of refinancing and
tax. These measures are used to enhance understanding and comparability of the
cash generation of the Group.
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
£m £m £m
Decrease in cash and cash equivalents in the year (22.2) (32.5) (18.3)
Add back:
Net cash flow on the purchase of businesses - - 26.0
Settlement of amounts payable for previous purchases of businesses 0.5 0.9 1.3
Investment in financial assets 1.0 - 0.2
Repayment of borrowings 0.4 0.2 1.4
Free cash flow (20.3) (31.4) 10.6
Add back:
Finance costs paid 18.5 14.4 30.1
Finance income received (1.4) (0.5) (1.3)
Other refinancing cash costs(1) - - 1.1
Tax paid 8.7 8.7 14.3
Operating cash flow 5.5 (8.8) 54.8
(1) Includes costs accrued in the prior year and paid in the current period.
e) Like-for-like sales
Like-for-like sales is calculated on a constant currency basis and represents
the growth in the Group's sales per day excluding any acquisitions or
disposals completed or agreed in the current and prior year. Revenue is not
adjusted for branch openings and closures. This measure shows how the Group
has developed its revenue for comparable business relative to the prior
period. As such it is a key measure of the growth of the Group during the
year. Underlying revenue is revenue from continuing operations excluding
non-core businesses.
UK Interiors UK Exteriors UK France Interiors France Exteriors France Germany Benelux Ireland Poland Total Group
Total Total
£m £m £m £m £m £m £m £m £m £m £m
Statutory and underlying revenue for the period to 30 June 2023 381.6 221.1 602.7 116.4 249.7 366.1 234.8 62.1 47.5 110.2 1,423.4
Statutory and underlying revenue for the period to 30 June 2022 331.9 224.0 555.9 111.2 239.8 351.0 224.5 56.1 55.9 115.1 1,358.5
% change year on year:
Statutory and underlying revenue 15.0% (1.3)% 8.4% 4.7% 4.1% 4.3% 4.6% 10.5% (15.0)% (4.3)% 4.8%
Impact of currency - - - (3.4)% (3.3)% (3.3)% (3.4)% (3.5)% (2.8)% (3.8)% (2.0)%
Impact of acquisitions (10.2)% - (6.1)% - - - (1.3)% - - - (2.7)%
Impact of working days (0.9)% (0.8)% (0.8)% - 0.8% 0.5% - - (0.7)% (0.7)% (0.3)%
Like-for-like sales 3.9% (2.1)% 1.5% 1.3% 1.6% 1.5% (0.1)% 7.0% (18.5)% (8.8)% (0.2)%
f) Other non-statutory measures
In addition to the alternative performance measures noted above, the Group
also uses underlying EPS (as set out in Note 7) and underlying net finance
costs (as set out in Note 5).
INDEPENDENT REVIEW REPORT TO SIG PLC
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2023 which comprises the Condensed Consolidated Income Statement, the
Condensed Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Balance Sheet, the Condensed Consolidated Cash Flow Statement,
the Condensed Consolidated Statement of Changes in Equity, and the related
explanatory notes 1 to 18. We have read the other information contained in the
half yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2023 is not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Auditing Practices Board.
A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with International
Standards on Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the group will be
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
Birmingham
7 August 2023
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