REG - Victoria PLC - Preliminary Results <Origin Href="QuoteRef">VCP.L</Origin> - Part 2
26/07/2016 07:06
- Part 2: For the preceding part double click ID:nRSZ1869Fa
going-concern basis. The Group's business
activities, together with the factors likely to affect its future development, performance and position, are set out in the
Chairman's Statement, the Strategic Review and this Financial Review.
Having reviewed the Group's budgets, projections and funding requirements, and taking account of reasonable possible
changes in trading performance, the Directors believe they have reasonable grounds for stating that the Group has adequate
resources to continue in operational existence for the foreseeable future.
The Directors are of the view that the Group is well placed to manage its business risks. Accordingly, the Directors
continue to adopt the going concern basis in preparing the Annual Report and Accounts.
Michael Scott
Group Finance Director
Consolidated Income Statement 53 weeks ended 2 April 2016 52 weeks ended 28 March 2015
For the 53 weeks ended 2 April 2016 Underlying performance Non- Reported numbers Underlying performance Non- Reported numbers
underlying underlying
items items
re-stated re-stated re-stated
Notes £000 £000 £000 £000 £000 £000
Continuing operations
Revenue 1 255,174 - 255,174 127,003 - 127,003
Cost of sales (169,930) (249) (170,179) (85,751) - (85,751)
Gross profit 85,244 (249) 84,995 41,252 - 41,252
Distribution costs (49,852) (157) (50,009) (22,268) - (22,268)
Administrative expenses (including intangible amortisation) (13,753) (3,787) (17,540) (9,941) (7,327) (17,268)
Other operating income 292 - 292 386 - 386
Operating profit/(loss) 21,931 (4,193) 17,738 9,429 (7,327) 2,102
Comprising:
Operating profit before exceptional items and intangible amortisation 1 21,931 - 21,931 9,429 - 9,429
Intangible amortisation - (2,315) (2,315) - (270) (270)
Asset impairment - (160) (160) - - -
Exceptional items 1,2 - (1,718) (1,718) - (7,057) (7,057)
.
Finance costs 3 (3,714) (4,734) (8,448) (1,498) (2,192) (3,690)
Profit/(loss) before tax 18,217 (8,927) 9,290 7,931 (9,519) (1,588)
Taxation (4,302) 961 (3,341) (1,658) - (1,658)
Profit/(loss) for the period from continuing operations 13,915 (7,966) 5,949 6,273 (9,519) (3,246)
Loss for the period from discontinued operations 9 - (2,132) (2,132) - (346) (346)
Profit/(loss) for the period 13,915 (10,098) 3,817 6,273 (9,865) (3,592)
Earnings/(loss) per share from continuing operations pence basic 4 36.08 (27.37)
diluted 4 35.53 (27.37)
Earnings/(loss) per share basic 4 23.15 (30.29)
diluted 4 23.02 (30.29)
Consolidated Statement of Comprehensive Income
For the 53 weeks ended 2 April 2016 53 weeksended2 April2016 52 week ended 28 March 2015
re-stated
£000 £000
Profit/(loss) for the period 3,817 (3,592)
Other comprehensive income/(expense):
Items that will not be reclassified to profit or loss:
Actuarial losses on pension scheme (152) -
Increase in deferred tax asset relating to pension scheme liability 53 -
Total items that will not be reclassified to profit or loss (99) -
Items that may be reclassified subsequently to profit or loss
Currency translation gains/(losses) 708 (798)
Totals items that may be reclassified subsequently to profit or loss 708 (798)
Other comprehensive income/(expense) for the year, net of tax 609 (798)
Total comprehensive income/(loss) for the year attributable to the owners of the parent 4,426 (4,390)
Consolidated Balance Sheet Group
As at 2 April 2016 2 April 28 March
2016 2015
re-stated
Notes £000 £000
Non-current assets
Goodwill 37,205 4,110
Intangible assets 43,476 8,858
Property, plant and equipment 38,811 27,789
Investment property 180 180
Investment in subsidiary undertakings ------ ------
Trade and other receivables ------ ------
Deferred tax asset 3,287 1,903
Total non-current assets 122,959 42,840
Current assets
Inventories 58,970 40,956
Trade and other receivables 42,562 30,397
Cash at bank and in hand 19,078 2,392
Other financial assets 384 ------
Total current assets 120,994 73,745
Total assets 243,953 116,585
Current liabilities
Trade and other payables 66,913 39,066
Current tax liabilities 2,891 2,014
Other financial liabilities 596 18,268
Total current liabilities 70,400 59,348
Non-current liabilities
Trade and other payables 11,524 12,260
Other financial liabilities 78,522 19,227
Deferred tax liabilities 9,129 2,370
Retirement benefit obligations 6 3,345 ------
Total non-current liabilities 102,520 33,857
Total liabilities 172,920 93,205
Net assets 71,033 23,380
Equity
Share capital 7 4,548 3,639
Share premium 52,462 10,144
Retained earnings 13,341 8,915
Other reserves 682 682
Total equity 71,033 23,380
Consolidated Statement of Changes in Equity
For the 53 weeks ended 2 April 2016
Share Share Retained Other Total
capital premium earnings reserves equity
£000 £000 £000 £000 £000
At 30 March 2014 (re-stated) 1,772 909 33,996 ---- 36,677
Loss for the period to 28 March 2015 ---- ---- (3,592) ---- (3,592)
Other comprehensive loss for the period ---- ---- (798) ---- (798)
Total comprehensive income ---- ---- (4,390) ---- (4,390)
Dividends paid ---- ---- (20,691) ---- (20,691)
Issue of share capital 1,867 9,235 ---- ---- 11,102
Movement in other reserves ---- ---- ---- 682 682
Transactions with owners: 1,867 9,235 (20,691) 682 (8,907)
At 28 March 2015 (re-stated) 3,639 10,144 8,915 682 23,380
Profit for the period to 2 April 2016 ---- ---- 3,817 ---- 3,817
Other comprehensive income for the period ---- ---- 609 ---- 609
Total comprehensive income ---- ---- 4,426 ---- 4,426
Issue of share capital 909 42,318 ---- ---- 43,227
Transactions with owners 909 42,318 ---- ---- 43,227
At 2 April 2016 4,548 52,462 13,341 682 71,033
Consolidated Statement of Cash Flows Group
For the 53 weeks ended 2 April 2016 53 weeks 52 weeks
ended ended
2 April 28 March
2016 2015
re-stated
Notes £000 £000
Cash flows from operating activities
Operating profit/(loss) from continuing operations 17,738 2,102
Adjustments for:
- Depreciation charges 10,347 6,405
- Amortisation of intangible assets 2,315 270
- Fair value charge for Contract for Differences ---- 7,397
- Goodwill adjustment (43) (895)
- Asset impairment 160 ----
- Profit on disposal of property, plant and equipment (143) (69)
- Exchange rate difference on consolidation 594 (27)
Net cash flow from operating activities before movements in working capital 30,968 15,183
Change in inventories (7,767) 1,511
Change in trade and other receivables 215 3,297
Change in trade and other payables 7,628 (2,600)
Cash generated/ (used) by continuing operations 31,044 17,391
Interest paid (3,243) (1,419)
Income taxes paid (3,243) (2,113)
Net cash flow from discontinued operations 65 (1,183)
Net cash inflow/ (outflow) from operating activities 24,623 12,676
Investing activities
Purchases of property, plant and equipment (9,752) (5,074)
Proceeds from disposal of Westwood Yarns Limited 431 -----
Proceeds on disposal of property, plant and equipment 1,034 816
Deferred consideration and earn-out payments (7,453) (1,000)
Acquisition of subsidiaries net of cash acquired (19,265) (14,616)
Net cash used in investing activities (35,005) (19,874)
Financing activities
(Decrease)/increase in long term loans (4,573) 8,160
Issue of share capital 43,043 1,543
Repayment of obligations under finance leases/HP (650) (241)
Dividends paid ----- (20,691)
Net cash generated/(used) in financing activities 37,820 (11,229)
Net increase/(decrease) in cash and cash equivalents 27,438 (18,427)
Cash and cash equivalents at beginning of period (8,502) 9,925
Effect of foreign exchange rate changes 142 -----
Cash and cash equivalents at end of period 10 19,078 (8,502)
Notes to the Accounts
1 Segmental information
The Group is organised into two operating divisions, the sale of floorcovering products in the UK and Australia.
Geographical segment information for revenue, operating profit and a reconciliation to entity net profit is presented
below.
Income statement
53 weeks ended 2 April 2016 52 weeks ended 28 March 2015
UK Australia Unallocated Total UK Australia Unallocated Total
central central
expenses expenses
re-stated re-stated re-stated
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue from continuing operations 196,908 58,266 ----- 255,174 91,610 35,393 ----- 127,003
Underlying operating profit 18,183 4,958 (1,210) 21,931 9,151 1,568 (1,290) 9,429
Non-underlying operating items (2,050) (425) ----- (2,475) (270) ----- ----- (270)
Exceptional operating items (1,151) (251) (316) (1,718) (398) ----- (6,659) (7,057)
Operating profit from continuing operations 14,982 4,282 (1,526) 17,738 8,483 1,568 (7,949) 2,102
Underlying interest charges (3,714) (1,498)
Non-underlying finance costs (4,734) (2,192)
Profit/(loss) before tax from continuing operations 9,290 (1,588)
Tax (3,341) (1,658)
Profit/(loss) after tax from continuing operations 5,949 (3,246)
Loss from discontinued operations * (2,132) (346)
Profit/(loss) for the period 3,817 (3,592)
* Loss from discontinued operations relates to the disposal of Westwood Yarns Limited, which was sold on 2 October 2015. (
see Note 9 )
Management information is reviewed on a segmental basis to operating profit.
During the year, no single customer accounted for 10% or more of the Group's revenue. Intersegment sales in the year and
in the prior year between the UK and Australia were immaterial.
Balance Sheet
As at 2 April 2016 As at 28 March 2015
UK Australia Unallocated Total UK Australia Unallocated Total
central central
assets/ assets/
liabilities liabilities
re-stated re-stated re-stated
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Segment total assets 205,085 38,299 569 243,953 95,876 20,377 332 116,585
Segment total liabilities (134,948) (24,098) (13,874) (172,920) (65,407) (7,939) (19,859) (93,205)
Net assets 70,137 14,201 (13,305) 71,033 30,469 12,438 (19,527) 23,380
The Group's non-current assets as at 2 April 2016 of £122,959,000 (2015: £42,840,000) are split geographically as follows:
£102,170,000 in the UK (2015: £37,580,000) and £20,789,000 in Australia (2015: £5,260,000).
Other segmental information
53 weeks ended 2 April 2016 52 weeks ended 28 March 2015
UK Australia Unallocated Total UK Australia Unallocated Total
central central
liabilities liabilities
re-stated re-stated re-stated
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Depreciation (from continuing operations) 8,314 2,033 ----- 10,347 4,409 1,996 ----- 6,405
Amortisation of acquired intangibles 1,890 425 ----- 2,315 270 ----- ----- 270
10,204 2,458 ----- 12,662 4,679 1,996 ----- 6,675
53 weeks ended 2 April 2016 52 weeks ended 28 March 2015
UK Australia Unallocated Total UK Australia Unallocated Total
central central
expenditure expenditure
re-stated re-stated re-stated
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Capital expenditure (from continuing operations) 8,961 1,242 ----- 10,203 4,064 1,010 ----- 5,074
2 Exceptional Items from continuing operations
2016 2015
re-stated
£000 £000
(a) Acquisition and disposal related costs (1,355) (398)
(b) Non-core closure costs (406) ----
(c) Contract for Differences ---- (7,554)
(d) Goodwill adjustment 43 895
(1,718) (7,057)
All exceptional items are classified within administrative expenses (except where noted).
(a) Professional fees in connection with the acquisitions and disposal completed during the year.
(b) Costs in relation to cessation of a non-core manufacturing process within the UK operation during the period. Of the
total closure cost, £249,000 is included within cost of sales and £157,000 within administrative expenses.
(c) The prior year charge relates to the Contract for Differences between the Company and Camden Holdings Limited. There
are no remaining liabilities outstanding in respect to the Contract for Differences.
(d) Credit of £43,000 in the year in relation to negative goodwill arising on the acquisition of A&A Carpets, as set out in
Note 8(c). Prior year adjustment is a result of the change in accounting policy in relation to sampling expenditure, as
set out it in Note 11(b).
3 Finance costs
2016 2015
£000 £000
Interest on loans and overdrafts wholly repayable within five years 2,435 940
Interest payable on BGF loan 1,199 513
Hire purchase and finance lease interest 80 45
Underlying interest costs 3,714 1,498
(a) Release of prepaid finance costs 228 -----
(b) BGF loan and option, redemption premium charge 108 224
(c) Unwinding of present value of deferred and contingent consideration 4,226 1,968
(d) Mark to market adjustment on foreign exchange forward contracts 136 -----
(e) Mark to market adjustment on interest rate swap 36 -----
Total finance costs 8,448 3,690
(a) Non-cash charge relating to the release of the prepaid costs on the previous bank facilities, which were refinanced in
April 2015.
(b) Non-cash annual cost of the redemption premium in relation to the BGF loan and option (see Note 11(a).
(c) Deferred and contingent consideration in respect to acquisitions is measured under IFRS 3, initially at fair value
discounted for the time value of money. The present value is then re-measured at each half-year and year-end to unwind the
time value of money. In addition, any changes arising from actual and forecast business performance are reflected,
although such movements form an immaterial portion of the overall annual charge. All such adjustments are non-cash items.
(d) Non-cash fair value adjustment on foreign exchange forward contracts.
(e) Non-cash fair value adjustment on an interest rate swap contract.
4 Earnings/(loss) per share
The calculation of the basic, adjusted and diluted (loss)/earnings per share is based on the following data:
Basic Adjusted Basic Adjusted
2016 2016 2015 2015
re-stated re-stated
£'000 £'000 £'000 £'000
Profit/(loss) attributable to ordinary equity holders of the parent entity from continuing operations 5,949 5,949 (3,246) (3,246)
Exceptional items:
Amortisation of acquired intangibles ---- 2,315 ---- 270
Acquisition costs ---- 1,355 ---- 398
Unwinding of present value of deferred and contingent consideration ---- 4,226 ---- 1,968
Closure costs ---- 406 ---- ----
Asset impairment ---- 160 ---- ----
Release of prepaid finance costs ---- 228 ---- ----
BGF loan and option, redemption premium charge ---- 108 ---- 224
Mark to Market adjustment on foreign exchange forward contracts and interest rate swap ---- 172 ---- ----
Goodwill adjustment (see Note 2 ) ---- (43) ---- (895)
Contract for Differences ---- ---- ---- 7,554
Tax effect on adjusted items where applicable ---- (961) ---- -----
Earnings for the purpose of basic and adjusted earnings/(loss) per share from continuing operations 5,949 13,915 (3,246) 6,273
Loss attributable to ordinary equity holders of the parent entity from discontinued operations (2,132) ---- (346) ------
Earnings for the purpose of basic and adjusted earnings/(loss) per share 3,817 13,915 (3,592) 6,273
Weighted average number of shares
2016 2015
Number of Number of
shares ('000) shares ('000)
Weighted average number of ordinary shares for the purposes of basic and adjusted earnings per share 16,489 11,859
Effect of dilutive potential ordinary shares:
BGF share options 560 120
Weighted average number of ordinary shares for the purposes of diluted earnings per share 17,049 11,979
The potential dilutive effect of the share options has been calculated in accordance with IAS 33 using the average share price in the period. The Group's earnings/(loss) per share are as follows:
2016 2015
re-stated
Pence Pence
Earnings/(loss) per share from continuing operations
Basic adjusted 84.39 52.90
Diluted adjusted 81.62 52.37
Basic 36.08 (27.37)
Diluted 1 35.53 (27.37)
Earnings/(loss) per share from discontinued operations
Basic (12.93) (2.92)
Diluted 1 (12.93) (2.92)
Earnings/(loss) per share
Basic adjusted 84.39 52.90
Diluted adjusted 81.62 52.37
Basic 23.15 (30.29)
Diluted 1 23.02 (30.29)
1 Earnings for the purpose of diluted (basic) earnings per share have been adjusted to add back the Business Growth Fund
('BGF') redemption premium charge as this cost is only incurred if the BGF share options are not exercised.
5 Rates of exchange
The results of overseas subsidiaries have been translated into Sterling at the average exchange rates prevailing during the
periods. The balance sheets are translated at the exchange rates prevailing at the period ends:
2016 2015
Average Year end Average Year end
Australia - A$ 2.0327 1.8526 1.8547 1.9184
6 Retirement benefit obligations
Defined contribution schemes
The Group operates a number of defined contribution pension schemes. The companies and the employees contribute towards
the schemes.
Contributions are charged to the Income Statement as incurred and amounted to £2,542,000 (2014: £1,532,000), of which
£1,742,000 (2015: £869,000) relates to the UK schemes. The total contributions outstanding at year end was £nil (2015:
£nil).
Defined benefit schemes
The Group has two defined benefit schemes, both of which relate to Interfloor Limited, which was acquired during the
period.
Interfloor Limited sponsors the Final Salary Scheme ("the Main Scheme") and the Interfloor Limited Executive Scheme ("the
Executive Scheme") which are both defined benefit arrangements. The defined benefit schemes are administered by a separate
fund that is legally separated from the Group. The trustees of the pension fund are required by law to act in the interest
of the fund and of all relevant stakeholders in the scheme. The trustees of the pension fund are responsible for the
investment policy with regard to the assets of the fund.
The last full actuarial valuations of these schemes were carried out by a qualified independent actuary as at 31 July
2015.
The contributions made by the
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