REG - Sosandar PLC - Final Results
12/07/2022 07:00
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RNS Number : 0873S Sosandar PLC 12 July 2022
Date: 12 July 2022
On behalf of: Sosandar plc ('Sosandar' or 'the Company')
Embargoed until: 0700hrs
Sosandar plc
Full Year Results
Continued strong momentum drives substantial revenue growth and a profitable
second half
Sosandar PLC (AIM: SOS), one of the fastest growing fashion brands in the UK
creating quality, trend-led products for women of all ages, is pleased to
announce its financial results for the year ended 31 March 2022 and an update
on trading for Q1 of the current financial year.
FY22 was a milestone year for the Group as it delivered an exceptionally
strong financial performance, exceeding market expectations that were upgraded
in April 2022, with nine consecutive months of profitability now delivered (H2
FY22 & Q1 FY23). Alongside this, significant strategic progress has been
made resulting in strong growth both on its own site and through third parties
with the increased diversity of product mix resonating with customers.
FY2022 Financial Highlights
· Revenue growth of 142% to £29.5m (FY2021: £12.2m), which included three
consecutive months of record revenue in September, October and November 2021
· EBITDA improved significantly to a £0.2m loss (FY2021: £2.9m loss) with
every month in H2 FY2022 being profitable
· Increase in gross margin to 56% (FY2021: 48%) reflecting a return to normal
trading conditions following the impact of the covid pandemic on the prior
year
· Net cash of £7.0m as at 31 March 2022 (FY2021: £3.9m) reflecting the equity
fundraise in May 2021, subsequent investment in stock and the Group's
profitable second half
FY2022 Operational and Strategic Highlights
· The Company continues to deliver increasing levels of customer engagement on
Sosandar.com with all KPIs increasing YoY:
o Total orders increased 84% to 508k
o Active customers increased 65% to 223k
o Conversion Rate of 3.87%, up from 3.09% in FY2021, highlighting the
effectiveness of the Company's unique creative process and highly effective
lifestyle imagery
o Average order frequency increased by 10% to 2.28 times per annum, a
reflection of how the distinct and diverse product range is attracting and
retaining customers
· In-house design process driving continued expansion of the product range
across all categories offering broader choice, with rapid sell through across
all channels
· Trading with third party partners; M&S, Next and John Lewis, continued to
be strong, with Sosandar product resonating very well across all types of
product category
· Successful launch with The Very Group on a wholesale arrangement in March 2022
with positive early momentum
Post-period Trading Highlights
· Very strong start to Q1 FY2023 with revenue of £10.4m representing a record
quarter and an increase of 81% against Q1 FY2022
· Trading in-line with market expectations* with strong performance on both own
site and third-parties
· First three months of the current financial year continued to be profitable,
resulting in nine consecutive months of profitability
· Product across all categories selling through rapidly with particularly strong
sales of workwear, occasion wear and holiday clothes
· Cash at 30 June 2022 of £6.1m, reflecting further investment in inventory and
continued strong trading
* Sosandar believes that market expectations for the year ending 31 March 2023
are currently revenue of £42.5 million, an EBITDA of £2.2 million and PBT of
£1.9 million.
FY2022 KPIs (Own Site)
Year ended 31 March 2022 Year ended 31 March 2021 Change
Web Visits 13,141,632 8,922,789 47%
Conversion rate 3.87% 3.09% +78bps
Number of orders 508,473 276,008 84%
AOV £90.39 £82.70 9%
Active customers 223,253 135,381 65%
Average Order Frequency 2.28 2.08 10%
Ali Hall and Julie Lavington, Co-CEOs commented:
"We are incredibly proud to be reporting another period of sustained growth
for Sosandar. It is thanks to our well-planned approach, together with our
entrepreneurial, agile culture that we have delivered a significant increase
in revenue, as well as moving into month-on-month profitability. This is an
important milestone for us, and having achieved it we are now better
positioned than ever for further success.
Notwithstanding the current macro-economic environment, trading in the new
financial year has started very well, with a record quarter for sales and
three further consecutive months of profitability. With the arrival of spring
and summer, we have seen our customers seek out a wide variety of product, in
particular smart clothes for work, bright colours for holidays and investment
pieces such as leather.
Looking ahead, we are excited for the next stage of our growth. Our winning
formula is evident in our results and over the next year we will focus on
expanding our product range and continuing to drive growth through our own
site and third parties. Return rates are in line with our expectations across
the product range and our costs continue to be carefully managed. We continue
to expand and diversify our supplier base to support our growth expectations
whilst further mitigating risk. As we have done over the past two years, we
will continue to use our agility and detailed planning to manage the business
effectively, as we move forward on our journey to becoming one of the largest
womenswear brands globally."
Presentations
Sosandar is hosting a webinar for analysts at 0900 hrs BST today. If you would
like to register, please contact sosandar@almapr.co.uk
The Company is also hosting a webinar for retail investors at 1130 hrs BST
today. If you would like to attend, please register here:
https://bit.ly/SOS_FY22_webinar (https://bit.ly/SOS_FY22_webinar)
Enquiries
Sosandar plc www.sosandar.com (http://www.sosandar.com)
Julie Lavington / Ali Hall, Joint CEOs c/o Alma PR
Steve Dilks, CFO
Singer Capital Markets +44 (0) 20 7496 3000
Peter Steel / Kailey Aliyar / Tom Salvesen
Alma PR Limited (Financial PR) +44 (0) 20 3405 0205
Sam Modlin / Susie Hudson / Lily Soares-Smith sosandar@almapr.co.uk (mailto:sosandar@almapr.co.uk)
This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").
About Sosandar plc
Sosandar provide a one-stop online shop for style-conscious women who have
graduated from price-led alternatives. The Company offers this underserved
audience fashion-forward, affordable, quality clothing to make them feel sexy,
feminine, and chic. The business sells predominantly own label exclusive
product designed in-house.
Sosandar's offers product across all womenswear categories, ensuring all
wardrobe needs can be fulfilled. The Company has brand partnerships in place
with Next, John Lewis, Marks & Spencer and The Very Group.
Sosandar's growth strategy is to build brand awareness and expand its customer
base through developing exceptional products, providing a seamless customer
experience and using impactful, lifestyle marketing activity. This is
underpinned by combining innovation with data analysis, which drives
successful product development and new customer targeting.
Sosandar was founded in 2016 and listed on AIM in 2017. More information is
available at www.sosandar-ir.com
(file:///C%3A/Users/SamModlin/Documents/www.sosandar-ir.com)
CHAIRMAN'S STATEMENT
Introduction
It is incredibly pleasing to be able to present annual results which reflect
another remarkable year of growth for the company, especially against a
backdrop of heightened macro-economic and societal challenges. Revenue of
£29.5m is 142% up year on year and our EBITDA loss of £0.2m is around 13
times smaller than the previous year. Our loss before tax improved to £0.6m
(FY21 £3.1m loss) with every month in the second half of the year being
profitable. These metrics provide great proof of our growing presence in our
market.
It is testament to the quality of our products and the strength of our
management team that we have been able to deliver such a strong performance
despite the backdrop of macro-economic and societal challenges that we have
all faced. Mitigating risk has been at the heart of our operation since
inception and while we could not claim to have foreseen all of these things
coming, we typically build flexibility into everything we do. Fostering
strong, long-term relations with a number of manufacturers in different
territories, pivoting rapidly between transport methods and responding rapidly
to changing consumer sentiment has meant that we have been able to navigate
these headwinds and deliver a record performance.
Drivers of growth
As reported last year, in May 2021 we completed a raise of c. £5.8m (via an
over-subscribed Placing, Subscription and Primary Bid offer). As planned,
these funds enabled investment into our inventory, allowing us to buy both
wider and deeper across our categories. The positive results of this strategy
started to show in the autumn, and our sales continued to grow across the year
as we put more stock into our third-party partners and offered greater range
on our own site.
Our growing balance sheet strength reflects the effectiveness of this
strategy, with net assets of £10.6m at year end being much healthier than at
31(st) March 2021. Crucially, that figure included a cash position of £7.0m.
This continued success is down to many factors, but above all, it is down to
our product. Led by our inspiring Co-CEOs, we have a growing, talented team
who understand our customers inside out and design unique products with them
in mind. Everything we do is centred upon delivering good-value, high quality,
lasting clothes for women who care about being fashionable and chic. Our
customers are not defined by age or any other demographic, rather they relish
the stylish aesthetic and regularly refreshed range we offer.
Our team
Over the year, our team has been agile, responsive, and intelligent. As
consumers have wrestled with going in and out of lockdown, returning to work,
starting to go out socially again, and all against cost-of-living challenges,
so our teams have altered our product mix and tailored all of our
communications and offers to ensure highest relevance and maximum engagement.
Our number of active customers has increased 65% year on year and is more
loyal than ever, with repeat customers now shopping 4.0 times per year.
I do want to take a moment to reflect on the whole team at Sosandar, a
business which is six years old, and was made up of just over 50 people at
March 2022. They have adapted well to a rapid growth environment, dealt with a
myriad of challenges and continually exhibited imaginative, enthusiastic,
customer-focussed commitment. Sosandar is no longer a start-up, although it
retains a few of those healthy facets, such as the ability to react quickly to
changing circumstances. Sosandar is a business based on data and planning,
with experienced people delivering great results for our customers. I
therefore take this moment to recognise all our fantastic team's hard work.
FY22 was the first full year of our third-party partnerships with Next,
M&S and John Lewis. While the initial approach from all three was already
testament to the appeal of our offering, it has been excellent to see sales
grow substantially over time, and it has become clear that each sees Sosandar
as a very important partner. Late in the year, we launched our first wholesale
partnership with Very.co.uk, which has begun well, and we continue to consider
further partnerships, both UK and overseas, in the future.
Committed to effective governance
The last couple of years have presented unprecedented governance challenges
for all businesses. The Board of Sosandar has remained committed to
maintaining and enhancing our corporate governance framework. Over the last
two years we have met far more frequently, via a blend of video call and
physical meetings and been effective as a result. We have an agile, balanced
board, able to make decisions based upon robust assessment and evaluation, but
always in a timely fashion. It was also a pleasure to welcome Jon Wragg as
Non-executive Director in April 2022. His substantial experience in the
fashion retail sector adds a valuable dimension to our Board.
Responsible business
Running our business with responsibility, in all its forms, remains important
to us. This is an evolving challenge, and we look to constantly develop our
actions in this area. There is more detail provided later in the report.
However, key achievements in the year include beginning the roll-out of
recycled packaging across our supply chain (formerly implemented only to
consumer-facing packaging), increasing wages for Clipper staff working on
Sosandar logistics, and engaging with a charity to support us and our
customers in an increased recycling of garments.
Outlook
The current financial year has started strongly and we are trading in line
with our expectations for full year growth. As we are well practiced at, we
will continue to manage the business carefully, building our partnerships and
growing our existing customer base whilst remaining cognisant of the external
environment.
Consumers are becoming ever more selective about where they spend and also
more demanding of those brands with which they spend. We are confident that
Sosandar will continue to benefit from this shift in behaviour as our fashion
forward, high quality, responsible value proposition clearly differentiates us
from the rest of the sector.
Bill Murray
Date: 11 July 2022
CO-CEO'S STATEMENT
A brilliant year
FY22 has been a brilliant year for Sosandar. We have successfully grown sales
by 142% year on year and, importantly, moved into profitability in the second
half. A result which is even more remarkable when set against a backdrop of
pandemic restrictions as well as the challenges of a worldwide supply chain
crisis and substantial inflation. All our KPIs are positive year-on-year, and
the forward momentum which can be felt throughout the business gives us cause
for great excitement.
It is thanks to our well-planned approach, together with our entrepreneurial,
agile culture, that we have improved both the top and bottom line in the
period. Our business is underpinned by the continuous collection and analysis
of multiple data points, which allows us to track exactly what trends are
emerging and where we need to act. Given the current macro-environment, this
approach is more important than ever.
As always, everything we achieved has been down to the hard work and
creativity of our people and our partners. We take this opportunity to provide
our heartfelt thanks.
A clear vision and purpose
Our vision is to become one of the largest womenswear brands globally. Our
purpose is to empower women of all ages to feel good in the clothes they wear,
catering to the burgeoning 'ageless' generation.
There is a clear ongoing shift in the consumer mindset towards fashion; women
are leaving behind dated ideas of what they must wear at what age, and instead
embracing clothes that make them feel good, work in their everyday lives, and
reflect their individual personalities. Our offering is ideally placed to
cater to this trend.
While our products are trend-led, our clothes are designed to be kept and
loved for years. This is why we invest so highly in quality and fit, reflected
in our price point.
Our strategy and future objectives
Our strategy is central to the ongoing success and scale of our business and
is spread over four pillars: product, marketing, sales channels, and supply
chain.
1. Expanding our unique product range
Our proven design, buying and merchandising capabilities make up the
foundations of our product strategy. We maximise the frequency of best-sellers
and ensure our customers receive new styles in line with the latest trends.
All our products are sold at a mid-price point and are increasingly designed
with sustainable materials - offering our customers on-trend, affordable, long
lasting, lifestyle appropriate clothes with high fashion credibility.
Further expansion is paramount for FY23, increasing the number of styles
across all categories with specific fast track development of categories such
as occasion wear, swim and beach, blazers and suits. To capture an even wider
customer base we are developing new shapes and an expansion of length
varieties to suit all heights.
2. Constant refinement of our data-driven marketing strategy
Since inception we have been constantly refining our marketing strategy based
on data driven learnings. We use aspirational product imagery and content to
connect and engage with our customers, building brand awareness through both
our own e-commerce site and a variety of channels, including TV, glossy
brochures, social media, PR and digital. Using these channels alongside our
email marketing, which has industry leading open rates and contributes to over
50% of revenue at no cost, enables us to successfully attract and retain
customers. All of these materials are created by our in-house creative team
who have a fantastic grasp on how women are feeling at that specific moment.
3. Driving sales through multiple channels
Our multi-channel sales strategy has two core pillars: our own e-commerce site
and third-party partnerships. Sosandar.com is the anchor of our success, it is
where our customers receive the most diverse choice and constant newness. In
addition, we have established very strong relationships with strategically
chosen third parties - all large retailers with whom we believed we could grow
rapidly and this has proven to be true.
As part of our strategy, we will continue to invest in our own site, the
bedrock of the Sosandar lifestyle hub whilst also exploring additional
third-party partnerships in the UK and abroad.
4. An agile, resilient supply chain
The importance of a diversified, flexible supply base and having partners with
expertise in this area, has always been at the heart of our operation. We are
an agile, online-only business, allowing us to continually adjust our product
offering, warehousing and fulfilment operations in line with the ever-changing
needs of our customers. Fostering strong, long-term relations with a number of
manufacturers in different territories and pivoting rapidly between transport
methods has been the key to our success and is vital to achieving our desired
scale.
Record financial performance
We have delivered a very strong revenue performance over the year, with sales
up 142% year on year to £29.5m. This was driven by a greater number of active
customers and more frequent purchases. A small uptick in average order value
also contributed. While we did benefit from a broader range of products being
available than in FY21 (49% more new styles in total), our ability to buy
deeper and therefore satisfy more customers has also been crucial. As
previously communicated, we maintained a relatively low (but highly
cost-effective) marketing spend as a proportion of revenues.
With the increase in sales and a continued monitor on costs, we were able to
steadily reduce our losses over the first half and were delighted to report
profitable monthly trading from October 2021 onwards. Overall, in the year
this led to an EBTIDA loss of £0.2m (FY21: £2.9m). Our loss before tax was
£0.6m, reflecting a one-off change in accounting treatment in relation to
website costs.
Our net cash balance as at 31 March was £7.0m (FY21: £3.9m), which will
allow us invest further into FY23.
In-house design led product range continues to attract and retain new
customers
The product range that we have created is what truly sets Sosandar apart. Our
sexy and chic clothing, made with quality materials and well-designed fit,
continues to resonate with fashion forward women. Our in-house design process
ensures that our clothes are long-lasting and can be worn for many occasions.
The success of our distinct, flattering styles with bold colours and prints
can be seen by the momentum we saw across our KPIs. Total orders increased by
84% to 508,473, repeat orders increased 93% to 366,848, whilst our conversion
rate increased to 3.9% from 3.1% and our average order frequency increased by
10% to 2.28 times per annum. This data provides further evidence that we have
an ever increasing and loyal customer base.
We believe that we are currently experiencing a widespread cultural shift in
how women dress, as they feel confident in their ability to stay at the
forefront of fashion no matter what their age. Creating product in line with
this shift is very important for our design teams.
Third Party arrangements go from strength to strength
Third party partnerships have become an important part of our ongoing
strategy. Trading with our longstanding partners, John Lewis, M&S and
Next, has continued to be very strong, with Sosandar product resonating very
well across all types of product category. We increased the amount of stock
allocated to each partner and this has enabled us to meet the demand that is
being generated through these channels.
At the time of our Half Year results announcement, we highlighted that we were
exploring new opportunities with other partners where there was a strong
strategic fit with the Sosandar brand. So, we were delighted to extend our
relationship with Next PLC in the second half, with Sosandar products being
sold through Next's 'Platform Plus'.
'Platform Plus' allows Next customers to order items picked from Sosandar's
warehouse hosted by Clipper, which are then delivered via Next's distribution
network. We launched with Next Platform Plus towards the end of Q1 FY23, and
are excited to be sharing even more of our product range with Next's customer.
In addition, following an approach by The Very Group, we were pleased to
commence a wholesale agreement in March 2022 and immediately saw strong sales
and quick repeat orders being placed.
The arrangements with the third parties further increase the brand's reach
amongst its core target demographic and are delivering incremental revenue and
profitability. We are confident that significant opportunities for further
growth remain with each of our current third parties and continue to consider
additional opportunities with a good strategic fit.
Infrastructure in place to scale
To ensure that we remain at the forefront of fashion innovation and remain
agile and entrepreneurial, we are constantly evolving our infrastructure and
capabilities.
We were delighted to take on more office space in April 2022. This has
doubled our space which will provide a positive working environment for our
team, allowing us to further attract and retain great people to drive our
business in the future.
We have built an incredibly strong team across the whole business with an
experienced layer of senior staff leading each department. We have
continued to add strength in depth across all departments during the year and
continue to be well supported by our external partners.
A confident outlook
To deliver six consecutive months of profitability alongside strong revenue
growth shows the trajectory that Sosandar is on. It is evident that our
product range is unique and desirable for fashion forward women.
This strong performance has continued into the new financial year. Every month
in the new financial year has been profitable and we have seen strong sales of
workwear, occasion wear and holiday clothes.
Whilst we are trading well and have not had any material disruption to date,
we remain vigilant to the external challenges including inflationary pressures
on consumer spending and believe our agile approach and understanding of our
customers positions us well.
We believe Sosandar is well on the road to becoming a substantial business and
has the infrastructure in place to scale as we continue to grow our customer
base.
Ali Hall & Julie Lavington
Date: 11 July 2022
FINANCIAL REVIEW
KPI's
Year ended 31 March 2022 £'000 Year ended 31 March 2021 £'000 Change
Revenue £29,458 £12,163 142%
Gross Profit £16,496 £5,844 182%
Gross Margin 56.0% 48.0% 800bps
Administrative Expenses £16,470 £8,729 89%
Profit / (Loss) before tax £(554) £(3,098) 82%
EBITDA £(229) £(2,925) 92%
Year ended 31 March 2022 Year ended 31 March 2021 Change
Sessions 13,141,632 8,922,789 47%
Conversion rate 3.87% 3.09% 78bps
Number of orders 508,473 276,008 84%
AOV £90.39 £82.70 9%
Active customers * 223,253 135,381 65%
Average Order Frequency ** 2.28 2.08 10%
* Active customers is the number of individual customers who purchased from
Sosandar.com in the last 12 months
** Average Order Frequency is the total number of orders in the last 12 months
divided by the number of active customers
The Group has delivered a significant step up in its financial performance,
underpinned by continued momentum across all KPI's, resulting in strong growth
in revenue and a substantial reduction in losses. The second half of
FY2022 was a milestone period with every month profitable which demonstrates
the trajectory that the Group is on with the foundations laid to be profitable
in FY2023.
The performance is even more pleasing given the challenges in the external
environment which have affected all businesses in our sector. Our agility
and underlying approach to spreading risk across our business has enabled us
to thrive in spite of these challenges including supply chain disruption and
inflationary pressures.
The fund raise (£5.8m gross proceeds) in May 2021 enabled the business to
invest in greater levels of stock from the autumn which was executed to plan,
enabling us to meet the clear and growing consumer demand for Sosandar
product, both on Sosandar.com and through each of the third party partners.
Revenue up +142% to £29.5m
The substantial growth in revenue reflects the ever-growing demand for
Sosandar product with incredibly strong performance from both Sosandar.com and
through third-party web platforms.
Revenue in the first half of FY 2022 was equal to the entirety of the prior
year with growth being sustained into the second half. The year included
a series of new records being broken for the business including three
consecutive record months for revenue in September, October and then again in
November. In addition, there were multiple records per day and per week as
well as new records for the number of orders and items throughout the second
half of the year.
Gross Margin +800bps to 56%
Gross Margin improved significantly compared with the prior year which
reflected a more normal year, being much less impacted by the covid pandemic.
As the scale of the business has increased, there are opportunities which
result in incremental benefit to the gross margin. In FY2022, this has
included ordering much larger quantities of stock including being able to
forward book capacity in factories which enables some prices to be agreed for
the season knowing that larger volumes will be required.
In addition, there has been an increase in the use of alternative freight
methods where applicable and where there was a high level of confidence that
stock will arrive on time. During the year, a larger proportion of stock has
arrived using rail, road and sea which are at reduced cost compared with air
resulting in gains to the gross margin. The proportion of non-air methods
will continue to increase whilst balancing the need for margin, on time
delivery, cash flow and environmental impact.
The margin in the prior year resulted from a much higher proportion of
promotional activity to ensure that inventory sold through, in particular
during periods of lockdown. This has not been repeated in FY2022 as the
impact of Covid was much less severe and consumers were gradually able to
return to some sort of normality including going back to work, going out and
taking holidays.
Administrative Expenses
Total administrative expenses increased by 89% to £16.5m (FY 2021 £8.7m)
compared to a 142% increase in revenue. As a result, administrative
expenses as a percentage of revenue reduced to 56% (FY2021 72%) reflecting the
benefit of scale whilst continuing to invest in all areas of the business to
drive sustained growth in revenue and all KPI's.
In terms of marketing activity, FY2022 was a normal year in terms of
sustaining customer acquisition activity across the whole year, with spending
focused on the months where the return on investment was greatest. Spend on
marketing increased by 43% year on year with the cost of acquisition remaining
at half the level it was pre-pandemic which enabled the cost-effective
recruitment of new customers to the brand.
The cost of fulfilment which includes warehousing and customer order delivery
costs increased by 96% during the year. Despite there being industry wide
wage inflation in the logistics sector, our partner, Clipper Logistics, has
done an excellent job managing the situation with minimal disruption to
Sosandar. Its retention of staff has been excellent, and it has
successfully recruited new staff to support the revenue growth whilst reducing
the cost per unit as result of ongoing productivity initiatives in the
warehouse. These initiatives are ongoing with further opportunities to
maintain or reduce the CPU further in FY2023.
By far the largest increase in administrative expenses is from third party
commissions (increased by 779%) given the substantial increase in revenue from
a relatively low base in the prior year. The commission is retained by John
Lewis, Next or Marks & Spencer and is reported within overheads covering
all costs of the operation including warehousing and fulfilment, returns
handling, marketing and other operational costs. The revenue and gross profit
figures are therefore undiluted when compared with trading through
Sosandar.com
Amortisation increased in FY2022 reflecting the reduction in term to fully
amortise website costs. These are now fully amortised with zero carry
forward balance.
Statement of Financial Position
The statement of financial position is robust. As at 31 March 2022, the
Group had net assets of £10.6m (FY2021 £5.0m) and a net current asset
position of £10.5m (FY 2021 £4.6m).
During FY2022, the financial position was strengthened following a fund-raise
of £5.8m gross which enabled the Group to further accelerate the growth
through greater investment in inventory to meet ever-increasing consumer
demand. As at 31 March 2022 the cash balance was £7.0m (FY2021 £3.9m).
The movements in the statement of financial position reflects the investment
in the business throughout the year, with an increase in inventory to £7.3m
(FY2021 £2.9m). This includes stock on hand, stock in transit reflecting
the higher proportion of supply coming to the UK via sea and road as well as
an increase in the right to return asset which covers post year end returns.
Trade and other payables increased to £6.8m (FY2021 £2.9m) reflecting the
step change in scale through FY2022. Creditor payment days have continued
to move favourably as the Group has become a more important and trusted
customer for our supply partners. Contract liabilities increased to £2.0m
(FY2021 £0.7m) which is as expected and reflects the growth in provision
required for post year end refunds for orders fulfilled within the year
reflecting the significant year on year increase in revenue.
Cashflow
The Group had a net cash position as at 31 March 2022 of £7.0m (FY2021
£3.9m). As highlighted already, the Group's cash position was strengthened
with the fund raise in May 2021 with the proceeds being utilised to:
· capitalise on the growth opportunity with its third party retail
partners by investing in a greater amount of stock from the Autumn / Winter
2021 season onwards. This included increasing both the number of styles and
the number of units per style to be sold through the third party partner
websites;
· provide additional funding to engage with other third party
partners in the UK and internationally; and
· provide additional working capital and further balance sheet
flexibility to support other incremental growth initiatives.
The plan for the Autumn / Winter 2021 season was executed as envisaged, with
further investment made ahead of the Spring / Summer 2022 season, resulting in
£4.4m increase in inventory during the year.
The Group is in a strong position, with sufficient working capital to take
advantage of opportunities in FY2023.
CONSOLIDATED STATEMENT OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE YEAR
ENDED 31 MARCH 2022
Year ended 31 March Year ended 31 March
2022 2021
Notes £'000 £'000
Revenue 29,458 12,163
Operational costs (12,962) (6,319)
Gross profit/(loss) 16,496 5,844
Other operating income 3 - 135
Administrative expenses (16,470) (8,729)
Share-based payment 17 (255) (175)
Depreciation and amortisation 9, 10 (317) (163)
Operating profit/(loss) (546) (3,088)
Finance costs 5 (8) (10)
Profit/(loss) before taxation (554) (3,098)
Income tax credit/(expense) 7 412 -
Group profit/(loss) for the year (142) (3,098)
Other comprehensive income - -
Total comprehensive profit/(loss) for the period (142) (3,098)
Earnings/(loss) per share:
Earnings/(loss) per share - basic and diluted, attributable to ordinary equity 8 (0.07) (1.61)
holders of the parent (pence)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2022
As at 31 March As at 31 March
2022 2021
Notes £'000 £'000
Assets
Non-current assets
Intangible assets 9 - 198
Property, plant and equipment 10 446 165
Total non-current assets 446 363
Current assets
Inventories 12 7,307 2,866
Trade and other receivables 14 2,495 728
Cash and cash equivalents 15 7,048 3,928
Deferred income tax asset 7 412 -
Total current assets 17,262 7,522
Total assets 17,708 7,885
Equity and liabilities
Equity
Share capital 17 221 192
Share premium 17 47,089 41,592
Capital Reserves 4,648 4,648
Other reserves 912 657
Reverse acquisition reserve (19,596) (19,596)
Retained earnings (22,654) (22,512)
Total equity 10,620 4,981
Current liabilities
Trade and other payables 18 6,761 2,855
Lease liability 19 38 49
Total current liabilities 6,799 2,904
Non current liabilities
Lease liability 19 289 -
Total non current liabilities 289 -
Total liabilities 7,088 2,904
Total equity and liabilities 17,708 7,885
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022
Year ended 31 March Year ended 31 March
2022 2021
Notes £'000 £'000
Cash flows from operating activities
Group profit/(loss) before tax (554) (3,098)
Share based payments 17 255 175
Depreciation and amortisation 9, 10 317 163
Finance costs 8 10
Working capital adjustments:
Change in inventories (4,441) 944
Change in trade and other receivables (1,768) 273
Change in trade and other payables 3,906 261
Net cash flow from operating activities (2,277) (1,272)
Cash flow from investing activities
Addition of property, plant and equipment 10 (36) (34)
Addition of intangibles 9 - (12)
Initial direct costs on right of use asset (18) -
Bank interest paid 5 (4) (5)
Net cash flow from investing activities (58) (51)
Cash flow from financing activities
Net proceeds from issue of equity instruments 16 5,526 -
Lease payment 19 (71) (82)
Net cash flow from financing activities 5,455 (82)
Net change in cash and cash equivalents 3,120 (1,405)
Cash and cash equivalents at beginning of period 15 3,928 5,333
Cash and cash equivalents at end of period 15 7,048 3,928
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022
Share capital Share premium Reverse acquisition reserve Capital redemption reserve Retained earnings Other reserves Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2020 192 41,592 (19,596) 4,648 (19,414) 482 7,904
Loss for the year - - - - (3,098) - (3,098)
Share-based payments 17 - - - - - 175 175
Balance at 31 March 2021 192 41,592 (19,596) 4,648 (22,512) 657 4,981
Loss for the year - - - - (142) - (142)
Share-based payments 17 - - - - - 255 255
Issue of share capital 16 29 5,784 - - - - 5,813
Costs on issue of share capital 16 - (287) - - - - (287)
Balance at 31 March 2022 221 47,089 (19,596) 4,648 (22,654) 912 10,620
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of those shares net of share issue expenses.
Share based payments reserve relate to the charge for share-based payments in
accordance with International Financial Reporting Standard 2.
Retained earnings represent the cumulative loss of the Group attributable to
equity shareholders.
Reverse acquisition reserve relates to the effect on equity of the reverse
acquisition of Thread 35 Limited.
Capital redemption reserve represents the aggregate nominal value of all the
deferred shares repurchased and cancelled by the Company. The reserve is
non-distributable.
COMPANY STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 MARCH 2022
As at 31 March As at 31 March
2022 2021
Notes £'000 £'000
Assets
Non-current assets
Investments 11 6,282 6,282
Loans to subsidiaries 13 - -
Total non-current assets 6,282 6,282
Current assets
Trade and other receivables 14 34 38
Cash and cash equivalents 15 3,399 2,952
Total current assets 3,433 2,990
Total assets 9,715 9,272
Equity and liabilities
Equity
Share capital 16 221 192
Share premium 16 47,089 41,592
Other reserves 912 657
Capital Reserves 4,648 4,648
Retained earnings (43,207) (37,847)
Total equity 9,663 9,242
Current liabilities
Trade and other payables 18 52 30
Total current liabilities 52 30
Total liabilities 52 30
Total equity and liabilities 9,715 9,272
In accordance with the provisions of the Companies Act 2006, the Company has
not presented a statement of profit or loss and other comprehensive income.
The Company's loss for the year was £5,360k (2021: £18,851k loss).
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2022
Year ended 31 March Year ended 31 March
2022 2021
Notes £'000 £'000
Cash flows from operating activities
Profit/(loss) before tax (5,360) (18,851)
Waiver of intercompany loan 13 4,681 18,366
Share based payments 17 255 175
Working capital adjustments:
Change in trade and other receivables 4 94
Change in trade and other payables 22 (235)
Net cash flow from operating activities (398) (451)
Cash flow from investing activities
Loans to subsidiaries 13 (4,681) (1,416)
Net cash flow from investing activities (4,681) (1,416)
Cash flow from financing activities
Net proceeds from issue of equity instruments 16 5,526 -
Net cash flow from financing activities 5,526 -
Net change in cash and cash equivalents 447 (1,867)
Cash and cash equivalents at beginning of period 15 2,952 4,819
Cash and cash equivalents at end of period 15 3,399 2,952
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022
Share capital Share premium Other reserves Capital redemption reserve Retained earnings Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2020 192 41,592 482 4,648 (18,996) 27,918
Loss for the year - - - - (18,851) (18,851)
Shares based payments - - 175 - - 175
Balance at 31 March 2021 192 41,592 657 4,648 (37,847) 9,242
Loss for the year - - - - (5,360) (5,360)
Share-based payments 17 - - 255 - - 255
Issue of share capital 16 29 5,784 - - - 5,813
Costs on issue of share capital 16 - (287) - - - (287)
Balance at 31 March 2022 221 47,089 912 4,648 (43,207) 9,663
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of those shares net of share issue expenses.
Share-based payments reserve relate to the charge for share-based payments in
accordance with International Financial Reporting Standard 2.
Retained earnings represent the cumulative loss of the Company attributable
to the equity shareholders.
Capital redemption reserve represents the aggregate nominal value of all the
deferred shares repurchased and cancelled by the Company. The reserve is
non-distributable.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 General information
Sosandar Plc (formerly Orogen Plc) (the 'Company') is a public limited company
by shares incorporated in England and Wales. Details of the registered office,
the officers and advisers to the Company are presented on the Company
Information page at the end of this report. The Company is listed on the AIM
market of the London Stock Exchange (ticker: SOS).
The principal activity of the company in the year under review was that of a
clothing manufacturer and distributer via internet and mail
order.
2 Significant accounting policies
Basis of preparation
The consolidated financial statements consolidate those of the Company and its
subsidiaries (together the 'Group' or 'Sosandar'). The consolidated financial
statements of the Group and the individual financial statements of the Company
are prepared in accordance with applicable UK law and UK adopted international
accounting standards (IFRSs) and as applied in accordance with the provisions
of the Companies Act 2006. The Directors consider that the financial
information presented in these Financial Statements represents fairly the
financial position, operations and cash flows for the year, in conformity with
IFRS.
These are the first financial statements prepared under UK adopted
international accounting standards. On 31 December 2020, IFRS as adopted by
the European Union, at that date, was brought into UK law and became UK
adopted international accounting standards, with future changes being subject
to endorsement by the UK Endorsement Board. Sosandar plc transitioned to
UK-adopted International Accounting Standards in its consolidated and Company
financial statements on 1 April 2021. This change constitutes a change in
accounting framework. However, there is no change on recognition, measurement
or disclosure in the financial year reported as a result of the change in
framework.
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in Chairman's
Statement on pages 2-3. The financial position of the Group, its cash flows
and liquidity position are described in the financial statements and
associated notes. In addition, note 21 to the financial statements includes
the Group's objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial instruments;
and its exposures to credit risk and liquidity risk.
In order to assess the going concern of the Group, the directors have reviewed
the Group's bank balances, cash flows, the annual budgets and forecasts,
including assumptions concerning revenue growth, marketing spend, returns and
repeat customers and expenditure commitments and their impact on cash flow.
These cash flow and profit and loss forecasts show the Group expect an
increase in revenue based on the assumptions set out in note 11 of the
financial statements. This will have sufficient headroom over available
banking facilities. Management continue to monitor costs and manage cashflows
against these forecasts.
In May 2021, the Group's cashflow position was strengthened through raising
gross proceeds of £5.8 million via a Placing, Subscription and Primary Bid
Offer. At 31 March 2022, the Group had a cash balance of £7.0m and is
therefore in a strong position, with sufficient working capital to take
advantage of opportunities in FY2023. This substantiates the view that the
Group is a going concern.
The directors continue to monitor the Group's going concern basis against the
backdrop of significant external events. Whilst Covid 19 still exists, it had
significantly less impact on the Group compared with the prior year and the
normal course of business resumed. In addition to this, it was concluded the
Ukraine war has had no material impact on the consumer behaviour. Therefore,
despite these events, the directors confirm that they have a reasonable
expectation that the Group will be able to continue in operation and meet its
liabilities as they fall due for the foreseeable future.
Should the underlying assumptions of the working capital model prove invalid
and the Group be unable to continue as a going concern it may be required to
realise its assets and discharge its liabilities other than in the normal
course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating
to the recoverability and classifications of recorded asset amounts or
liabilities that may be necessary should the Group and Company be unable to
continue as a going concern.
After making enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the financial statements.
Consolidation
The consolidated financial statements include the financial statements of the
Company and its subsidiaries and associated undertakings. Thread 35 Limited
has a reporting date of 31 March.
Subsidiaries are all entities over which Sosandar Plc has the power to govern
the financial and operating policies generally accompanying a shareholding of
more than one half of the voting rights.
The existence and effect of potential voting rights that are currently
exercisable or convertible are
considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Company. They are de-consolidated from the date that
control ceases.
In November 2017, Sosandar Plc ('Company') acquired the entire issued share
capital of Thread 35 Ltd ('legal subsidiary') for a consideration of
£6,281,618, satisfied by the issue of shares of £1,603,422 and cash of
£4,678,196. As the legal subsidiary is reversed into the Company (the legal
parent), which originally was a publicly listed cash shell company, this
transaction cannot be considered a business combination, as the Company, the
accounting acquiree, does not meet the definition of a business under IFRS 3
'Business Combinations'. However, the accounting for such capital
transaction should be treated as a share-based payment transaction and
therefore accounted for under IFRS 2 'Share-based payment'. Any difference in
the fair value of the shares deemed to have been issued by the Thread 35 Ltd
(accounting acquirer) and the fair value of Sosandar Plc's (the accounting
acquiree) identifiable net assets represents a service received by the
accounting acquirer.
Although the consolidated financial information has been issued in the name of
Sosandar Plc, the legal parent, it represents in substance continuation of the
financial information of the legal subsidiary.
The assets and liabilities of the legal subsidiary are recognised and measured
in the Group financial statements at the pre-combination carrying amounts and
not restated at fair value.
The retained earnings and other reserves balances recognised in the Group
financial statements reflect the retained earnings and other reserves balances
of the legal subsidiary immediately before the business combination and the
results of the period from 1 April 2017 to the date of the business
combination are those of the legal subsidiary only.
The equity structure (share capital and share premium) appearing in the Group
financial statements reflects the equity structure of Sosandar Plc, the legal
parent. This includes the shares issued in order to effect the business
combination.
Functional and presentation currency
Items included in the financial statements of the Group are measured using the
currency of the primary economic environment in which the entity operates (the
functional currency). The financial statements are presented in Pounds
Sterling (£), which is the Group's presentation currency and the Company's
functional currency.
Foreign currency transactions are translated into the functional currency
using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
The results and financial position of all Group entities (none of which has
the currency of a hyper-inflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
· monetary assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date of that
statement of financial position;
· income and expenses for each income statement are translated at
average exchange rates (unless this average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the rate on the dates of the
transactions); and
· all resulting exchange differences are recognised as a separate
component of equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations, and of borrowings and other currency
instruments designated as hedges of such investments, are taken to
shareholders' equity. When a foreign operation is partially disposed of or
sold, exchange differences that were recorded in equity are recognised in the
income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent throughout the financial
period. Standards and amendments to UK adopted international accounting
standards (IFRSs) effective as of 1 April 2021 have been applied by the Group.
There were a number of standards and interpretations which were in issue at 31
March 2022 but were not effective for periods commencing 1 April 2021 and have
not been adopted for these Financial Statements.
These include:
· Amendments to IFRS 3 Business Combinations - change in reference to the
conceptual framework (applicable on or after 1 January 2022)
· Amendments to IFRS 17 Insurance Contracts - measurement of insurance
liabilities (applicable on or after 1 January 2023)
· Amendments to IAS 1 Presentation of Financial Statements - further disclosure
requirements including additional detail around accounting policies
(applicable on or after 1 January 2023)
· Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors - definition of accounting estimates (applicable on or after 1 January
2023)
· A number of narrow-scope amendments to IFRS 3, IAS 16, IAS 17, IAS 37 and some
annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16 (applicable on or
after 1 January 2022)
The Directors have assessed the full impact of these accounting changes on the
Company. To the extent that they may be applicable, the Directors have
concluded that none of these pronouncements will cause material adjustments to
the Group's Financial Statements. They may result in consequential changes to
the accounting policies and other note disclosures. The new standards will not
be early adopted by the Group and will be incorporated in the preparation of
the Group Financial Statements from the effective dates noted above.
The directors anticipate that the adoption of these standards and
interpretations in future periods will have no material effect on the
financial statements of the group.
The Directors have taken advantage of the exemption available under Section
408 of the Companies Act 2006 and not presented an income statement nor a
statement of comprehensive income for the Company alone.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRS requires
management to make estimates and judgements that affect the reported amounts
of assets and liabilities as well as the disclosure of contingent assets and
liabilities at the year end and the reported amounts of revenues and expenses
during the reporting period. Estimates and judgements are continually
evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. The key areas identified by the Group are as follows:
Inventories
Inventories are valued at the lower of cost and net realisable value, on a
weighted average cost basis. Net realisable value is the estimated selling
price in the ordinary course of the business less applicable variable selling
expenses. Cost of purchase comprises the purchase price including import
duties and other taxes, transport and handling costs and other attributable
costs, less trade discounts.
A provision is made to write down any slow-moving or obsolete inventory to net
realisable value.
The provision is £761k at 31 March 2022 (2021: £665k). A difference of 1%pt
in the provision as a percentage of gross inventory would give rise to a
difference of +/- £81k in gross profit (2021: +/- £35k).
Contract liabilities - refund accruals
Accruals for sales returns are estimated on the basis of historical returns
and are recorded so as to allocate them to the same period in which the
original revenue is recorded. These accruals are reviewed regularly and
updated to reflect management's latest best estimates, although actual returns
could vary from these estimates. The accrual for refunds totalled £2,029k
(2021 refund accrual: £726k) and a right to returned goods asset recognised
of £814k (2021: £311k). A performance obligation is deemed for returns and
refunds. A 14 days return policy is noted for a full refund through
Sosandar.com and up to 30 days on third party retailer websites. A difference
of 1%pt in the sales returns rate have an impact of +/- £92k (2021: +/-
£53k) on the refund provision, and +/- £38k (2021: +/- £21k) on the right
to returned goods asset.
Calculation of share-based payment charges
The charge related to equity-settled transactions with employees is measured
by reference to the fair value of the equity instruments at the date they are
granted, using an appropriate valuation model selected according to the terms
and conditions of the grant. Judgement is applied in determining the most
appropriate valuation model and in determining the inputs to the model.
Judgements are also applied in relation to estimations of the number of
options which are expected to vest, by reference to historic leaver rates and
expected outcomes under relevant performance conditions. Please see note 18.
Depreciation of property, plant and equipment and amortisation of other
intangible assets
Depreciation and amortisation are provided to write down assets to their
residual values over their estimated useful lives. The determination of these
residual values and estimated lives, and any change to the residual values or
estimated lives, requires the exercise of management judgement. Please see
notes 10 and 11.
Principal accounting policies
The principal accounting policies are summarised below. They have been
consistently applied throughout the year covered by the financial statements.
Revenue recognition
Revenue is recognised at the point where legal title in the goods passes from
the Group to the customer. This includes the price paid for the goods as
well as any delivery charge where applicable. Typically legal title is
passed when the goods are despatched from the warehouse and as the invoice is
created.
Revenue is reported after making deduction for actual and anticipated returns,
relevant vouchers and sales taxes.
No breakdown of revenue can be made in tabular form as all sales are UK and
online, with similar risk profiles.
Business combinations
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value and the amount of any
non-controlling interest in the acquiree. In the consolidated financial
statements, acquisition costs incurred are expensed and included in general
and administrative expenses.
Intangible assets
Identifiable development expenditure is capitalised to the extent that the
technical, commercial and financial feasibility can be demonstrated. Costs are
capitalised where the expenditure will bring future economic benefit to the
company.
Amortisation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful economic lives. The estimated
useful economic life of intangible assets has been revised to 5 years. For any
assets older than this with a net book value at year end, the amortisation has
been accelerated to make the net book value nil at the end of the financial
year.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less subsequent
accumulated depreciation and accumulated impairment losses, if any. Historical
cost includes expenditure that is directly attributable to the acquisition of
the items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. All other repairs and maintenance
are charged to profit or loss during the financial period in which they are
incurred.
Depreciation on property, plant and equipment is calculated using the
straight-line method to write off their cost over their estimated useful lives
at the following annual rates:
Plant and
Machinery
15% Straight line
Computer Equipment
33.33% Straight line
Fixture and
Fittings
15% Reducing balance
Office
Equipment
25% Reducing balance
Leasehold Improvements
20% Straight line
Right of Use Asset
20% Straight line
On 1 February 2022, the Group entered into a new lease. The corresponding
right of use asset is depreciated over the life of the lease at 20% per annum.
Equity
Equity instruments issued by the Company are recorded at the value of the
proceeds received, net of direct issue costs, allocated between share capital
and share premium.
Government grants
Grants are recognised only when there is reasonable assurance that the Group
will comply with the conditions attached to them and that the grants will be
received. Any grants that are receivable as compensation for expenses already
incurred are recognised in profit or loss in the period in which they become
receivable.
Impairment of non-financial assets
At each statement of financial position date, the Company reviews the carrying
amounts of its investments to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where the asset
does not generate cash flows that are independent from other assets, the
Company estimates the recoverable amount of the cash-generating unit to which
the asset belongs. An intangible asset with an indefinite useful life is
tested for impairment annually and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years. A
reversal of an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the reversal of
the impairment loss is treated as a revaluation increase.
Taxation
Income tax
Income tax expense represents the sum of the tax currently payable and
deferred tax. The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the same income
statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group and Company's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the statement of financial position date.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted for using
the statement of financial position liability method. Deferred tax
liabilities are
generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences can be
utilised.
Such assets and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax is reviewed at each statement of financial
position date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group and Company intends to settle its current tax assets
and liabilities on a net basis.
Share-based compensation
The fair value of the employee and suppliers' services received in exchange
for the grant of the options is recognised as an expense. The total amount to
be expensed over the vesting year is determined by reference to the fair value
of the options granted, excluding the impact of any non-market vesting
conditions (for example, profitability and sales growth targets). Non-market
vesting conditions are included in assumptions about the number of options
that are expected to vest. At each statement of financial position date, the
entity revises its estimates of the number of options that are expected to
vest. It recognises the impact of the revision to original estimates, if any,
in the income statement, with a corresponding adjustment to equity. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options
are exercised.
The fair value of share-based payments recognised in the income statement
taking into account conditions attached to the vesting and exercise of the
equity instruments. The expected life used in the model is adjusted; based on
management's best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The share price volatility
percentage factor used in the calculation is based on management's best
estimate of future share price behaviour and is selected based on past
experience, future expectations and benchmarked against peer companies in the
industry.
Pension costs
The Group contributes to a defined contribution scheme for employees. The
costs of these contributions are charged to the statement of comprehensive
income on an accruals basis as they become payable under the scheme rules.
Investments
Investments in subsidiary companies are stated at cost less any provision for
impairment.
Investments are accounted for at cost unless there is evidence of a permanent
diminution in value, in which case they are written down to their estimated
realisable value. Any such provision, together with any realised gains and
losses, is included in the statement of comprehensive income.
Impairment of investments
The impairment of the carrying value of the investment in subsidiaries is
calculated using forward-looking assumptions of profit growth rates, discount
rates and timeframe which require management judgement and estimates that
cannot be certain.
Provisions
Provisions are recognised when the Group and Company has a present obligation
as a result of a past event, and it is probable that the Group and Company
will be required to settle that obligation. Provisions are measured at the
Directors' best estimate of the expenditure required to settle the obligation
at the statement of financial position date and are discounted to present
value where the effect is material.
Financial instruments
Non-derivative financial instruments comprise investments in equity and debt
securities, trade and other receivables, cash and cash equivalents, loans and
borrowings, and trade and other payables. Non-derivative financial instruments
are recognised initially at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transactions costs, except
as described below. Subsequent to initial recognition non-derivative financial
instruments are measured as described below.
A financial instrument is recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial assets are derecognised if
the Group's contractual rights to the cash flows from the financial assets
expire or if the Group transfers the financial assets to another party without
retaining control or substantially all risks and rewards of the asset. Regular
purchases and sales of financial assets are accounted for at trade date, i.e.
the date that the Group commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Group's obligations specified in
the contract expire or are discharged or cancelled.
Fair values
The carrying amounts of the financial assets and liabilities such as cash and
cash equivalents, receivables and payables of the Group and Company at the
statement of financial position date approximated their fair values, due to
the relatively short-term nature of these financial instruments.
Trade payables and other non-derivative financial liabilities
Trade payables and other creditors are non-interest bearing and are measured
at cost.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with
banks, other short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the statement of financial position.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at their cost when the contractual right to receive cash
or other financial assets from another entity is established.
A provision for doubtful debts is made when there is objective evidence that
the Group will not be able to collect all amounts due according to the
original terms of the receivables. Significant financial difficulties of the
debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments are considered
indicators that a trade and other receivables are impaired.
Financial assets and liabilities
The Group classifies its financial assets at inception into three measurement
categories; 'amortised cost', 'fair value through other comprehensive income'
('FVOCI') and 'fair value through profit and loss' ('FVTPL'). The Group
classifies its financial liabilities, other than financial guarantees and loan
commitments, as measured at amortised cost. Management determines the
classification of its investments at initial recognition. A financial asset or
financial liability is measured initially at fair value. At inception
transaction cost that are directly attributable to its acquisition or issue,
for an item not at fair value through profit or loss, is added to the fair
value of the financial asset and deducted from the fair value of the financial
liability.
Amortised cost measurement
The amortised cost of a financial asset or financial liability is the amount
at which the financial asset or liability is measured at initial recognition,
minus principal payments, plus or minus the cumulative amortisation using the
effective interest method of any difference between the initial amount
recognised and maturity amount, minus any reduction for impairment.
Fair value measurement
Fair value is the amount for which an asset could be exchanged, or a liability
settled, between knowledgeable, willing parties in an arm's length transaction
on the measurement date. The fair value of assets and liabilities in active
markets are based on current bid and offer prices respectively. If the market
is not active the group establishes fair value by using appropriate valuation
techniques. These include the use of recent arm's length transactions,
reference to other instruments that are substantially the same for which
market observable prices exist, net present value and discounted cash flow
analysis.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or where the group has transferred
substantially all of the risks and rewards of ownership. In transaction in
which the group neither retains nor transfers substantially all the risks and
rewards of ownership of a financial asset and it retains control over the
asset, the group continues to recognise the asset to the extent of its
continuing involvement, determined by the extent to which it is exposed to
changes in the value of the transferred asset. There have not been any
instances where assets have only been partly derecognised. The group
derecognises a financial liability when its contractual obligation are
discharge, cancelled or expire.
Impairment losses from contracts with customers
The Group assesses at each financial position date whether there is objective
evidence that a financial asset or group of financial assets is impaired. If
there is objective experience (such as significant financial difficulty of
obligor, breach of contract, or it becomes probable that debtor will enter
bankruptcy), the asset is tested for impairment. The amount of the loss is
measured as the difference between the asset's carrying amount and the present
value of the estimated future cash flows (excluding future expected credit
losses that have not been incurred) discounted at the financial asset's
original effective interest rate (that is, the effective interest rate
computed at initial recognition). The carrying amount of the asset is reduced
through use of an allowance account. The amount of loss is recognised in the
Statement of Comprehensive Income.
Leases
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
· fixed payments (including in-substance fixed payments), less any
lease incentives receivable
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be determined, the lessee's incremental borrowing
rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
· the amount of the initial measurement of lease liability
· any lease payments made at or before the commencement date less any
lease incentives received
· any initial direct costs, and
· restoration costs.
Payments associated with short-term leases and leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss.
Short-term leases are leases with a lease term of 12 months or less. Low-value
assets comprise IT-equipment and small items of office furniture less than
£5k.
3 Other operating income
The Group did not receive any government grants through the Furlough scheme
during the year (2021: £135k).
4 Operating loss
31 March 2022 31 March 2021
£'000 £'000
Operating loss is stated after charging/(crediting):
Operating lease rentals 24 47
Auditors' remuneration:
Audit fee - group and company 44 32
Non audit fees - 4
Legal and other fees 167 105
Foreign currency (gain)/loss 48 (33)
Share based payment 255 175
5 Finance cost
31 March 31 March
2022 2021
£'000 £'000
Interest on the lease 4 5
Other interest 4 5
Total 8 10
6 Employees
31 March 31 March
2022 2021
£'000 £'000
Aggregate Directors' emoluments including consulting fees 629 414
Wages and salaries 1,641 1,324
Social security costs 230 175
Pension costs 94 72
Share-based payments 255 175
Total 2,849 2,160
31 March 31 March
2022 2021
£'000 £'000
Directors 8 7
Staff 45 34
Total 53 41
Directors' remuneration
Details of emoluments received by Directors of the Company for the year ended
31 March 2022 are as follows:
2022 2022 2022 2021
Base Salary Pensions Total Total
£ £ £ £
Alison Hall 172,500 13,800 186,300 145,800
Julie Lavington 172,500 13,800 186,300 145,800
Steve Dilks 119,750 8,382 128,132 63,344
Nicholas Mustoe 28,500 - 28,500 24,000
Bill Murray 39,750 - 39,750 24,000
Adam Reynolds 39,000 - 39,000 48,000
Mark Collingbourne 28,500 - 28,500 24,000
Andrew Booth 28,500 - 28,500 24,000
Total 629,000 35,982 664,982 498,944
7 Income tax
a) Analysis of charge in the period
31 March 31 March
2022 2021
Current tax £'000 £'000
UK corporation tax based on the profit/loss for the period - -
Adjustment in respect of prior periods - -
Total current tax charge/(credit) - -
Deferred tax
Origination and reversal of timing differences (412) -
Total deferred tax charge/(credit) (412) -
b) Factors affecting the tax charge for the period
31 March 31 March
2022 2021
£'000 £'000
Loss on ordinary activities before taxation (554) (3,098)
Tax at the UK corporation tax rate of 19% (2021: 19%) (105) (589)
Expenses not deductible for tax purposes 60 15
Losses unutilised - 581
Adjustments to losses 1 -
Fixed asset differences (2) (7)
Remeasurement of deferred tax for changes in tax rates (1,256) -
Movement in deferred tax not recognised 890 -
Tax on loss on ordinary activities (412) -
On 3 March 2021, it was announced that the UK corporation tax rate will
increase to 25% from 19%, effective from 1 April 2023. The deferred tax asset
recognised in the accounts has been calculated using the current year tax rate
of 19% (2021: 19%). The unrecognised deferred tax asset amounts to £4,692,886
(2021: £3,970,000) and has been calculated at the tax rate of 25%.
The deferred tax asset has been recognised due to the expectation that it will
be reversed in future years.
8 Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number of ordinary
shares in issue during the year:
31 March 31 March
2022 2021
Loss after tax attributable to equity holders of the parent (£'000) (142) (3,098)
Weighted average number of ordinary shares in issue 216,844,739 192,268,110
Fully diluted average number of ordinary shares in issue 216,844,739 192,268,110
Basic and diluted earnings/(loss) per share (pence) (0.07) (1.61)
Where a loss is incurred the effect of outstanding share options and warrants
is considered anti-dilutive and is ignored for the purpose of the loss per
share calculation. For the prior year loss per share, the share options
outstanding as at 31 March 2021 totalled 20,217,698 and were potentially
dilutive.
Website Trademark Total
9 Intangible assets - Group
£'000 £'000 £'000
Cost
At 1 April 2020 218 - 218
Additions 10 2 12
At 31 March 2021 228 2 230
Amortisation
At 1 April 2020 20 - 20
Charge for the year 11 1 12
At 31 March 2021 31 1 32
Carrying value 31 March 2021 197 1 198
Cost
At 1 April 2021 228 2 230
Additions - - -
Disposals - - -
At 31 March 2022 228 2 230
Amortisation
At 1 April 2021 31 1 32
Charge for the year 197 1 198
Disposals - - -
At 31 March 2022 228 2 230
Carrying value 31 March 2022 - - -
10 Property, plant and equipment - Group
Computer Equipment Fixtures and fittings equipment Right of use asset Total
£'000 £'000 £'000 £'000
Cost
At 1 April 2020 86 279 192 557
Additions 7 27 - 34
At 31 March 2021 93 306 192 591
Accumulated depreciation
At 1 April 2020 33 167 75 275
Charge for year 25 51 75 151
At 31 March 2021 58 218 150 426
Carrying value 31 March 2021 35 88 42 165
Cost
At 1 April 2021 93 306 192 591
Additions 30 6 364 400
At 31 March 2022 123 312 556 991
Accumulated depreciation
At 1 April 2021 58 218 150 426
Charge for year 27 38 54 119
At 31 March 2022 85 256 204 545
Carrying value 31 March 2022 38 56 352 446
11 Non-current assets
Investments in subsidiaries and associates:
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Cost at 1 April - - 6,282 6,282
Disposals during the year - - - -
Cost at 31 March - - 6,282 6,282
Impairment at 1 April - - - -
Disposals during the year - - - -
Impairment at 31 March - - - -
Carrying value as at 31 March - - 6,282 6,282
Investments are tested for impairment at the balance sheet date. The
recoverable amount of the investment in Thread 35 Ltd at 31 March 2022 was
assessed on the basis of value in use. As this exceeded carrying value no
impairment loss was recognised.
The key assumptions in the calculation to access value in use are the future
revenues and the ability to generate future cash flows. The most recent
financial results and forecast approved by management were for the next 9
years and included terminal value. The projected results were discounted at a
rate which is a prudent evaluation of the pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the
cash-generating unit.
The key assumptions used for the value in use calculation in 2022 were as
follows:
%
Discount rate
11
Returns assumption
45
Compound annual revenue growth rate
20
The Directors have made significant estimates on future revenues and EBITDA
growth in future years based on the budgeted investment and expansion of our
clothing and footwear ranges, increased stocking levels and continued
investment in marketing channels to acquire new customers.
The Directors have performed a sensitivity analysis to assess the impact of
downside risk of the key assumptions underpinning the projected results of the
Group. The projections and associated headroom used for the Group is sensitive
to the EBITDA growth assumptions that have been applied.
The subsidiaries of Sosandar Plc are as follows:
Incorporation % Holding % Holding 2021
2022
Subsidiary companies Holding Type of share held
UK
Thread 35 Limited Direct Ordinary shares 100 100
12 Inventories - Group
31 March 31 March
2022 2021
£'000 £'000
Stock - finished goods 6,493 2,555
Right to returned stock 814 311
Total 7,307 2,866
The cost of inventories charged in the year as an expense equated to £12,962k
(2021: £6,319k). Right to returned stock relates to the cost of products sold
in the financial year but expected to be returned after the financial period.
13 Loans to subsidiaries
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Loan to subsidiary - - - -
The loan made to Thread 35 Limited by Sosandar Plc of £4,681,346 (2021:
£18,366,142) was waived at the year end. The interest due on this loan was
waived at the start of the year and subsequently, no further amounts are due
between the two entities.
14 Trade and other receivables
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade receivables 1,683 305 - -
VAT recoverable 16 18 16 18
Other receivables and prepayments 796 405 18 20
Trade and other receivables 2,495 728 34 38
The Directors consider that the carrying amount of trade and other receivables
approximates their fair value.
15 Cash and cash equivalents
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Cash at bank 7,048 3,928 3,399 2,952
16 Share capital and reserves
Details of ordinary shares issued are in the table below:
Ordinary Shares (£0.01)
Number of shares Issue Price £ Total Share Capital Total Share Premium £'000
£'000
At 31 Mar 2021 192,268,122 0.001 192 41,592
Shares issued: Fundraise May 21 28,840,210 0.001 29 5,739
Shares issued: Warrants exercised Dec 21 300,000 0.001 - 45
Direct costs: Fundraise May 21 (287)
At 31 Mar 2022 221,408,332 0.001 221 47,089
17 Share based payments
Share option plans
The Group has a share ownership compensation scheme for Directors and senior
employees of the Group. On 2(nd) November 2017 share options over ordinary
shares of 15.1p were issued with a further issue over ordinary shares of 29.1p
issued on 25(th) February 2019. On 21 June 2021 the Group announced the
establishment of a new Long Term Incentive Plan in which it granted new nil
cost options totalling 21,431,942 ordinary shares of 0.1 pence each to its
executive directors and members of the senior management team. Some of the
existing options granted, totalling 13,888,742 ordinary shares, were modified
as part of these arrangements. There was no incremental fair value because of
this modification.
The options are settled in equity once exercised. If the options remain
unexercised for a period after ten years from the date of grant, the options
expire.
Details of the number of share options and the weighted average exercise price
("WAEP") outstanding during the period are as follows:
31 March 2022 31 March 2021
Number ('000) WAEP £ Number ('000) WAEP £
Outstanding at 31 March 2021 20,218 0.154 20,400 0.155
Modifications in the year (13,889) 0.154 - -
11,789 0.000
Issuances in the year 9,643 0.000 - -
Cancellations in the year - - (182) 0.265
Outstanding at 31 March 2022 27,761 0.035 20,218 0.154
Exercisable at 31 March 2022 14,682 0.035 13,502 0.154
The options outstanding at 31 March 2022 had a weighted average exercise price
of £0.035 and a weighted average remaining contractual life of 8.59 years.
The fair values of options granted prior to 2021 were calculated using the
Black Scholes pricing model. The fair values of the options granted in June
2021 were calculated using the Monte Carlo model. The Group used historical
data to estimate expected period to exercise, within the valuation model.
Expected volatilities of options outstanding granted prior to the Company's
admission to AIM were based on implied volatilities of a sample of listed
companies based in similar sectors. The risk-free rate for the expected period
to exercise of the option was based on the UK gilt yield curve at the time of
the grant.
The Group recognised a charge of £255k (2021: £175k) related to
equity-settled share-based payment transactions during the year.
The assumptions used in the valuation of the options at the grant date are as
follows. There were no new share issues in the year.
Share options 2022 Share options 2020 Share options 2018
Exercise price 0.0p 29.1p 15.1p
Share price at date of grant 23.75p 29.1p 15.1p
Risk-free rate 0.25% 0.25% 0.25%
Volatility 42% 25% 25%
Expected Life 5 years 10 years 10 years
Fair Value 0.13 0.07 0.05
18 Trade and other payables
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade payables 2,869 1,110 22 3
Accruals 656 405 30 27
Other payables 269 12 - -
VAT payable 856 529 - -
Contract liabilities 2,029 726 - -
Deferred income 82 73
Trade and other payables 6,761 2,855 52 30
19 Leases
The Group has a property lease contract which is used in its day to day
operations.
31 March 31 March
2022 2021
£'000 £'000
Lease liability brought forward 49 126
Additions 345 -
Finance cost 4 6
Lease payments (71) (83)
Lease liability recognised in statement of financial position 327 49
31 March 31 March
2022 2021
£'000 £'000
Of which
Current lease liabilities 38 49
Non-current lease liabilities 289 -
Lease liability recognised in statement of financial position 327 49
The lease has a term of five years with a break clause after three years. On 1
April 2022, the Group entered into a second property lease in Wilmslow,
England in order to expand its office space.
20 Related party transactions
During the year to 31 March 2022 the Group was charged £39,000 (2021:
£48,000) for services provided by Reyco Limited, a company controlled by A
Reynolds. There was no amount outstanding at the balance sheet date (2021:
£nil).
During the year to 31 March 2022 the Group was charged £28,500 (2021:
£24,000) for services provided by Morrison Kingsley Consultants Limited, a
company controlled by M Collingbourne. There was £3,040 outstanding at the
balance sheet date (2021: £nil).
During the year to 31 March 2022 the Group was charged £39,750 (2021:
£24,000) for services provided by Bill Murray and Associates, a company
controlled by B Murray. There was no amount outstanding at the balance sheet
date (2021: £nil).
During the year to 31 March 2022 the Group was charged £28,500 (2021:
£24,000) for services provided by N Mustoe. There was £10,000 outstanding at
the balance sheet date (2021: £nil).
During the year to 31 March 2022 the Group was charged £28,500 (2021:
£24,000) for services provided by Skale Limited, a company controlled by A
Booth. There was £3,000 outstanding at the balance sheet date (2021: £nil).
During the year to 31 March 2022, a management fee of £166,302 (2021:
£157,946) was waived in line with the intercompany loan.
During the year to 31 March 2022, interest of £nil (2021: £nil) was charged
to Thread 35 Limited relating to the intercompany loan as a result of the
waiving of the loan and interest by the Company.
The Company's intercompany loan receivable balance from Thread 35 Limited at
the year-end was £nil (2021: £nil).
21 Financial instruments - risk management
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining responsibility for
them it has delegated the authority for designing and operating processes that
ensure the effective implementation of the objectives and policies to the
Group's finance function. The Board receives regular updates from the
management team through which it reviews the effectiveness of the processes
put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. The Company's operations expose it to some financial risks
arising from its use of financial instruments,
the most significant ones being cash flow interest rate risk, foreign exchange
risk, liquidity risk and capital risk. Further details regarding these
policies are set out below:
Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from its deposits of cash
and cash equivalents with banks. The cash balances maintained by the Group
are proactively managed in order to ensure that attractive rates of interest
are received for the available funds but without affecting the working capital
flexibility the Group requires. The Group is not at present exposed to cash
flow interest rate risk on borrowings as it has no debt. No subsidiary
company of the Group is permitted to enter into any borrowing facility or
lease agreement without the prior consent of the Company.
Foreign exchange risk
Foreign exchange risk may arise because the Group purchases stock in
currencies other than the functional currency.
The Group monitors whether there is a requirement for foreign currency on a
monthly basis. The Group considers this policy minimises any unnecessary
foreign exchange exposure.
Liquidity risk
Liquidity risk arises from the Group's management of working capital; it is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The principal obligations of the Group arise in
respect of committed expenditure in respect of its stock purchases and design.
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its obligations when they become due. To achieve this aim,
it seeks to maintain readily available cash balances (or agreed facilities) to
meet expected requirements and to raise new equity finance if required for
future development or expansion.
The Board receives cash flow projections on a monthly basis as well as
information on cash balances. The Board will not commit to material
expenditure in respect of its ongoing commitments prior to being satisfied
that sufficient funding is available to the Group to finance the planned
programmes. For cash and cash equivalents, the Company only uses recognised
banks with medium to high credit ratings.
The maturity of borrowings and other financial liabilities (representing
undiscounted contractual cash-flows) is as follows:
Group Company
Within 1 year 1-2 years Within 1 year 1-2 years
As at 31 March 2022 £'000 £'000 £'000 £'000
Trade and other payables 6,761 - 52 -
Lease liabilities 38 289 - -
Total 6,799 289 52 -
Group Company
Within 1 year 1-2 years Within 1 year 1-2 years
As at 31 March 2021 £'000 £'000 £'000 £'000
Trade and other payables 2,855 - 29 -
Lease liabilities 49 - - -
Total 2,904 - 29 -
Financial assets
At the reporting date, the Group held the following financial assets, all of
which were classified as financial assets at amortised cost:
Group Company
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Cash and cash equivalents 7,048 3,928 3,399 2,952
Trade & other receivables 2,027 728 34 38
Total 9,075 4,656 3,433 2,990
Financial liabilities
At the reporting dates, the Group held the following financial liabilities,
all of which were classified as other financial liabilities at amortised cost:
Group Company
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade payables 2,869 1,110 22 3
Accruals 656 405 30 27
Other payables 269 12 - -
VAT payable 856 529
Contract liabilities 2,029 726 - -
Lease liabilities 327 49 - -
Trade and other payables 7,006 2,831 52 30
Capital risk
The Group's objectives when managing capital are to safeguard the ability to
continue as a going concern in order to provide returns for shareholders and
benefits to other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
22 Post balance sheet events
On 1 April 2022, the Group entered into a new lease in Wilmslow, England in
order to expand its office space. On 1 April 2022, the lease liability on the
new lease totalled £361k.
On 14 April 2022, Jonathan Wragg was appointed as a Director to the Board.
23 Contingent liabilities
The Company and Group has no contingent liabilities.
24 Ultimate controlling party
There is no ultimate controlling party of the Company.
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