REG - Virgin Wines UK PLC - Interim Results
15/03/2022 07:00
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RNS Number : 7452E Virgin Wines UK PLC 15 March 2022
Virgin Wines UK plc
("Virgin Wines", the "Company" or the "Group)
Interim results for the six months ended 31 December 2021
Strong growth in subscription sales and high cash generation
Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct to consumer
online wine retailers, today announces its interim results for the six months
ended 31 December 2021 ("H1 2022"). All numbers shown are post-IFRS16
adjustments.
Highlights
· Total revenue of £40.6m, in line with the six months ended 31
December 2020 ("H1 2021") and up 55% compared to the six months ended 31
December 2019 ("H1 2020").
o Subscription based revenue of £26.3m up 23% on £21.4m in H1 2021.
· EBITDA of £3.7m (H1 2021: £4.5m) due to increased investment in
new customer acquisition and additional operating costs as a listed business.
· Profit before tax of £3.2m (H1 2021: £3.4m).
· Earnings per share of 4.6p (H1 2021: 6.0p).
· Net cash(1) of £13.6m up £5.2m since 30 June 2021 (H1 2021:
£8.4m).
· Customer base:
o Subscription memberships((2)) increased by 7% during H1 2022 to 158k.
o Active customer base((3)) grew to 185k up by 9% since H1 2021.
o 12 month rolling new customer conversion((4)) up to 56.2% (H1 2021:
51.3%).
· New partnership with Moonpig, driving sales in the commercial
channel.
· Launch of BeerSave and SpiritSave subscription schemes.
(1) Net cash of £13.6m is total cash of £18.8m less Wine Bank customer
deposits of £5.2m.
(2) Members of the Company's WineBank and Wine Plan subscription schemes
(3) Customers who have made a repeat purchase within last 12 months
(4) Percentage of recruits who have become active customers
Jay Wright, Chief Executive Officer at Virgin Wines, said:
"As expected, the trading environment has evolved considerably over recent months, and given strong prior year comparatives, we have worked hard to maintain encouraging growth from our core sales channels, whilst maintaining strict discipline around our customer acquisition and our cost control. This result demonstrates the strength of the underlying business model, our discipline in acquiring good quality customers, the reliability of future subscription revenues from a highly engaged customer base and the ability to generate free cashflow as well as our award-winning consumer propositions, the quality of our wines and our outstanding customer service.
The second half of the year has started well. We continue to make progress with our strategic initiatives and remain in line with management expectations."
Enquiries:
Virgin Wines UK plc
Jay Wright, CEO Via Hudson Sandler
Graeme Weir, CFO
Liberum Capital Limited
(Nominated Adviser and Sole Broker)
Clayton Bush
James Greenwood
John Fishley
Christopher Whitaker
Hudson Sandler
(Public Relations)
Alex Brennan
Dan de Belder
Charlotte Cobb
Nick Moore
Tel: +44 20 3100 2222
virginwines@hudsonsandler.com (mailto:virginwines@hudsonsandler.com) Tel: +44
20 7796 4133
Notes to editors:
Virgin Wines is one of the UK's largest direct-to-consumer online wine
retailers. It is an award-winning business which has a reputation for
supplying and curating high quality products, excellent levels of customer
service and innovative ways of retailing.
The Company, which is headquartered in Norwich, UK, was established in 2000 by
the Virgin Group and was subsequently acquired by Direct Wines in 2005 before
being bought out by the Virgin Wines management team, led by CEO Jay Wright
and CFO Graeme Weir, in 2013. It listed on the London Stock Exchange's
Alternative Investment Market (AIM) in 2021.
Virgin Wines has more than 1,000 products in its portfolio and an active
customer base of more than 180,000 worldwide. It has approximately 200
employees and more than 40 trusted winemaking partners and suppliers around
the world.
The Company drives the majority of revenue though its main channels such as
email and web, as well as its growing subscription schemes including WineBank,
Wine Plan and Pay As You Go.
Along with its extensive range of award-winning products, Virgin Wines
continues to grow its beer and spirit categories, successfully launching more
than 40 exclusive products as well as its BeerSave and SpiritSave schemes.
https://www.virginwinesplc.co.uk/
RESULTS
Unaudited Unaudited
31 December 31 December
2021 2020
£'000 £'000
Revenue 40,609 40,589
Cost of sales (27,979) (27,850)
Gross profit 12,630 12,739
Underlying operating expenses (9,224) (8,678)
Underlying operating profit 3,406 4,061
Finance costs (70) (679)
Underlying profit before taxation 3,336 3,382
Share based payments (177) -
Profit before taxation 3,159 3,382
Taxation (608) (595)
Profit for the period 2,551 2,787
Basic earnings per share (pence) 4.6 6.0
Diluted earnings per share (pence) 4.5 6.0
CHIEF EXECUTIVE'S STATEMENT
Business Overview
The past two years has seen rapid and continuous change to both the trading
environment and consumer behaviour and the last six months has been no
exception. It has been essential during this period that the business has
continued to stay focused on its key principles of acquiring low-cost,
high-quality recruits, building the number of customers in its subscription
schemes, delivering outstanding customer service, and sourcing and blending
the best value wines from across the world, driven by many thousands of
customer reviews and ratings.
As well as being highly focussed on delivering our financial and commercial
objectives, we have also been acutely aware of the personal toll the
challenges of recent times has placed on our people and we have continued to
support and look after our team members in a number of practical ways.
Clearly our business is impacted by the widespread cost pressures that are
evident with significant increases in the cost of packaging, labour, energy,
shipping, glass and courier charges all adding pressure to the cost base.
Wherever possible we are mitigating these increases through beneficial FX
rates and driving efficiencies.
The business has continued to perform well, with the loyalty and strength of
the WineBank subscription base being of particular note, whilst our strategy
of supporting the expansion of our commercial channel has been highly
successful. The challenges around supply chain, that have been so well
documented, have been largely avoided by pre-empting the issue, stocking up
early and managing stock efficiently. This in turn has allowed us to keep
gross margin largely in line with expectations whilst being able to
successfully deliver customers the wines they want, when they want.
Trading Overview
Revenue for H1 2022 was £40.6m, in line with H1 2021 despite a significantly
more challenging trading environment and up 55% compared with H1 2020. The
Company delivered adjusted profit before tax1 of £3.3m which was broadly
in-line with £3.4m in H1 2021.
Cash generation remained strong delivering net cash2 of £13.6m as at 31
December 2021, a £5.2m increase since 30 June 2021. This leaves us in a
positive position to assess further opportunities to invest in growth, whether
that be in adjacent markets, through M&A or through international
expansion.
Subscription Schemes
Sales generated by our subscription schemes grew 23% in H1 2022 to
£26.3m compared with £21.3m in H1 2021 and by 77% compared to £14.8m in H1
2020. The popularity of our WineBank scheme continues to build with
membership increasing by 11k customers (9.3%) in the past
six months delivering a 28% increase in revenue year-on-year.
The balance of total customer deposits in WineBank continued to build with
£5.2m of customer money held at 31 December 2021 (WineBank deposits are not
included in the company net cash balance). This was up 42% on 31 December 2020
and is an excellent indicator of future revenue as customers
save for their ongoing wine orders.
Active customer base and sales retentions
Whilst the WineBank membership base grew encouragingly, the decreased levels
of organic walk-up traffic and the lapsing of PAYG customers led to only
modest growth of 2k in the active customer base((3)) over the past six months
to 185k customers.
However, the continued focus on recruiting a high-quality and loyal customer
base, alongside building the number of customers in our subscription schemes,
resulted in a sales retention rate of 94% which helped underpin total Group
sales.
Customer Acquisition
Customer acquisition was the most challenging area of the business. Aggressive
competitor pricing coupled with the wider promotional schemes made throughout
the sector to potential customers over the Christmas trading period, led to
decreased traffic to the website from acquisition activity. Despite this
challenging environment, we continued to focus on low-cost, high-quality
recruits that can deliver market leading levels of payback and deliver a
positive ROI.
New customers were acquired at an average cost of £13.62 per new customer (H1
2021: £12.65) while the conversion rate(4) achieved was 56.2% (H1 2021:
51.3%) once again highlighting the quality of the customers being acquired. We
were also pleased to have scaled our partnership programme by delivering 55%
more partnerships than during H1 2021.
Development Channels
Over recent years we have actively developed sales channels in adjacent
markets to supplement the Company's core D2C wine business, moving into
commercial/B2B activity, gifts, and beers and spirits. We have specifically
focussed on driving the commercial channel having identified significant
headroom to scale and which we are delighted has delivered £4.2m of sales,
up 25% compared with H1 2021. The recent partnership with Moonpig,
successfully launched in September 2021, is a good example of the
opportunities we believe exist to drive growth in this area.
With online gifting being such a beneficiary of Covid-19 based restrictions on
retail over the 2020 Christmas trading period revenue from our gifting channel
was down 27% against H1 2021, but 47% ahead against H1 2020. There are still
many opportunities to scale the gift channel with the launch of a fully
personalised gift service planned for Q3 2022 whilst recent partnerships with
Virginia Haywood (hampers) and Arena Flowers offer excellent new cross
marketing opportunities.
In Q2 2022 we were also delighted to launch subscription schemes for our beer
and spirit channels - BeerSave and SpiritSave. Operating on the same
successful premise as WineBank, where customers save money each month in their
BeerSave/SpiritSave account, they then receive preferential pricing on all
products across respective categories. This preferential pricing is also
available as standard for all WineBank customers, so our focus in the short
term will be on communicating this new initiative and scaling the beer and
spirit categories to our existing customer base where we believe there is
still substantial headroom.
A Purpose Driven Business
At the centre of our brand DNA is our purpose, which is 'to make people's
lives more enjoyable'. This is just as appropriate for our colleagues and our
winemaking partners as it is for our customers and this philosophy of ensuring
every interaction we have with each other, as well as with our customers, adds
value to their lives in a positive way is core to our culture.
Over the past year we have introduced a free Employee Assistance Programme to
all staff that offers everything from help with practical matters such as
personal finance right through to individual one-to-one counselling. We have
also developed an internal ESG Group that has 14 volunteers from across the
business who are particularly passionate about our environment, both inside
and outside our business. Everything from creating opportunities for
colleagues to meet and interact in a variety of social situations (as our
teams start the transition to office working again) through to the creation of
our new charity wine initiative, The Benevolent Range, have been driven by
this group. We are in the process of collecting our scope 3 data alongside
creating an emission reduction roadmap in order to work towards net zero.
We have continued to work hand in hand with our winemaking partners across the
world, and to support them as they deal with supply/harvest issues. This
support has come in a variety of ways, from amending payment terms to more
forward planning on wine requirements and firm commitments where appropriate.
Our focus on exceptional customer service continues and we are delighted to
have been able to maintain our 'Excellent' TrustPilot rating, even over a
period where there have been so many challenges with warehouse labour, courier
capacity and supply chain disruption. Despite these headwinds we have managed
to continue to keep the wine flowing into our customers' homes efficiently,
accurately and with speed.
Operations
There has been significant pressure across our operations over the past six
months. Warehouse labour, principally temporary labour over the Christmas
period, was particularly competitive. This coupled with a significant increase
in absenteeism as the Omicron variant took hold in December 2021 led to a
challenging environment, and ultimately to an early cut-off (by 48 hours) for
guaranteed Christmas deliveries costing the business circa £800k of sales in
the final week running up to Christmas.
Increased costs in shipping, packaging, glass and courier charges led to
pressure on the cost price of our goods although we were able to mitigate much
of this through our flexible merchandising model, efficiencies and beneficial
FX rates. There continues to be inflationary pressure in multiple areas of the
supply chain to our business and we therefore keep pricing continually under
review to ensure gross margins are maintained.
(1) Adjusted Profit before tax is stated after adding back share based
payments of £177k.
(2) Cash balance £13.6m is stated after the deduction of Wine Bank
customers deposits of £5.2m.
(3) Customers who have made a repeat purchase within last 12 months
(4) Percentage of recruits who have become active customers
FINANCIAL REVIEW
Revenue
Group revenue of £40.6m which is broadly flat compared with £40.5m in H1
2021 and up 55% compared with £26.2m in H1 2020. Revenue from subscription
schemes of £26.3m up 23% on £21.4m in H1 2021 and 77% on £14.8m in H1 2020.
Gross Profit
Gross profit margin fell by 30 basis points to 31.1% (H1 2021: 31.4%) mainly
due to higher discounts offered on introductory case offers and an increase in
packaging costs. Despite cost challenges from increases in inbound freight
costs the D2C product margin before packaging and delivery was relatively
unchanged at 40.4% (H1 2021: 40.5%).
EBITDA
EBITDA of £3.7m was lower than £4.5m in H1 2021 due to an increase in new
customer acquisition investment of £240k and an increase in operating costs
as a listed business (Plc head office costs £233k and share based payments
£177k). Net contribution from repeat customers was marginally higher.
Profit Before Tax
Profit before tax was £3.2m (H1 2021: £3.4m). Profit before tax on a
like-for-like basis adjusted for share based payments was marginal lower at
£3.3m (H1 2021: £3.4m).
Share based payments
The Group provided for a share-based payment expense of £177k (H1 2021: £0k)
relating to the share based long term incentive plan for the leadership team.
Finance expenses
Finance expense of £70k in H1 2022 relates to the interest charge for Right
of Use Assets. Finance expense of £679k in H1 2021 included £61k relating to
the interest charge for Right of Use Assets and £618k relating to interest on
Investor Loans which were repaid in full on 2 March 2021 as part of the IPO
listing.
Earnings per share
Earnings per share decreased to 4.6p from 6.0p H1 2021 primarily due to the
issue of new shares as part of the IPO listing on 2 March 2021.
Dividend
The Board is not recommending the payment of an interim dividend however, it
will keep the Group's dividend policy under review.
Foreign currency
All group income is derived from UK activity and denominated in GBP. The Group
purchases supplies, mainly wine, from the global market predominantly in
Euros, US Dollars and Australian Dollars. The Group hedges its foreign
currency purchases to provide clarity on future cost prices.
Inventory
As previously indicated the Group invested in higher stockholding to mitigate
the impact of potential supply disruption throughout the 2021 calendar year.
As a result, inventory increased by £2.9m from 30 June 2021 to £10.2m as at
31 December 2021 (H1 2021: £6.4m). The Group continues to monitor the supply
conditions but expects to see stockholding return to normal levels in our Q4
as supply issues ease.
Cash
The Group monitors net cash after deducting Wine Bank customer deposits. The
cash in hand excluding Wine Bank deposits at 31 December 2021 increased by
£5.2m to £13.6m (FY 2021: £8.4m). Loans outstanding at 31 December 2020 of
£12.0m were repaid in full on 2 March 2021 from funds raised as part of the
IPO listing.
SUMMARY AND OUTLOOK
This result demonstrates the strength of the underlying business model, our
discipline in acquiring quality customers, the reliability of future
subscription revenues from a highly engaged customer base and the ability to
generate free cashflow.
There are many positives with customers on our subscription schemes performing
strongly and our key WineBank customer base growing steadily. Our disciplined
business model ensures that it continues to generate high levels of cash which
in turn gives opportunities to invest in a range of strategic initiatives to
drive growth when, and where, appropriate. This, in tandem with the strong
growth of our commercial channel, the ongoing initiatives delivering increased
marketing opportunities through our gift channel and the introduction of our
new subscription schemes in the beer and spirit categories leaves us
optimistic that the business is well placed to grow strongly over future
years.
There are two particularly challenging areas within the business, specifically
driving customer acquisition numbers at the forecasted levels while also
delivering low-cost, high-quality recruits, and the increasing cost pressure
that is mounting on the business from a multitude of sources. However, we
continue to drive new partnerships as well as optimising our digital marketing
strategy, telemarketing, and CRM recruitment to help deliver the acquisition
numbers the business is targeting, whilst we continually look to find
efficiencies to help mitigate against rising costs while maintaining strict
margin control.
Overall, notwithstanding the challenging trading environment, the business is
in very good health and the second half of the year has started well. We have
a strong and highly cash generative business model. We have many opportunities
to grow the business through customer acquisition as well as new revenue
channels and remain confident for the future and in our ability to create
shareholder value. We continue to make progress with our strategic initiatives
and remain in line with management expectations.
Jay Wright
Chief Executive Officer
15 March 2022
Condensed consolidated statement of comprehensive income
for the period ended 31 December 2021
Unaudited Unaudited
31 December 31 December
Note 2021 2020
£'000 £'000
Revenue 40,609 40,589
Cost of sales (27,979) (27,850)
Gross profit 12,630 12,739
Operating expenses (9,401) (8,678)
Operating profit 3 3,229 4,061
Finance costs 5 (70) (679)
Profit before taxation 3,159 3,382
Taxation (608) (595)
Profit for the financial period and total comprehensive income 2,551 2,787
Basic earnings per share (pence) 6 4.6 6.0
Diluted earnings per share (pence) 6 4.5 6.0
Condensed consolidated statement of financial position
as at 31 December 2021
Unaudited Unaudited Audited
31 December 31 December 30 June
2021 2020
Note 2021
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 7 11,027 10,886 10,842
Property, plant and equipment 8 288 179 163
Right of use assets 9 2,656 3,023 2,867
Deferred tax asset 492 1,438 1,100
Total Non-current assets 14,463 15,526 14,972
Current assets
Inventories 10,176 6,372 7,239
Trade and other receivables 10 1,930 2,244 1,552
Derivative financial instruments 16 31 -
Cash and cash equivalents 18,799 20,038 15,660
Total current assets 30,921 28,685 24,451
Total assets 45,384 44,211 39,423
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 11 (21,754) (19,771) (18,314)
Lease liability (506) (501) (489)
Loans and borrowings - (11,980) (5)
Total current liabilities (22,260) (32,252) (18,808)
Non-current liabilities
Provisions (267) (248) (275)
Lease liability (2,502) (2,787) (2,713)
Total non-current liabilities (2,769) (3,035) (2,988)
Total liabilities (25,029) (35,287) (21,796)
Net assets 20,355 8,924 17,627
Equity
Share capital 11 558 477 558
Share premium 11,989 31 11,989
Own share reserve (36) (36) (36)
Merger reserve 65 - 65
Other reserve 177 - -
Retained earnings 7,602 8,452 5,051
Total Equity 20,355 8,924 17,627
Condensed consolidated statement of changes in equity
for the period ended 31 December 2021
Called up Own share Total Shareholders'
share capital Share premium reserve Merger reserve Retained earnings Other reserve funds
£'000 £'000 £'000 £'000 £'000 £'000
1 July 2020 477 31 (36) - 5,665 - 6,137
Profit for the financial year - - - - 2,787 - 2,787
31 December 2020 unaudited 477 31 (36) - 8,452 - 8,924
1 July 2021 558 11,989 (36) 65 5,051 - 17,627
Profit for the financial year - - - - 2,551 - 2,551
Share-based payments - - - - - 177 177
31 December 2021 unaudited 558 11,989 (36) 65 7,602 177 20,355
Condensed consolidated statement of cash flows
for the period ended 31 December 2021
Unaudited Unaudited
31 December 31 December
2021 2020
£'000 £'000
Cash flows from operating activities
Profit before taxation 3,159 3,382
Adjustments for:
Depreciation and amortisation 464 398
Net finance costs 70 679
Share-based payment 177 -
Decrease/(increase) in trade and other receivables (394) 248
Increase in inventories (2,938) (1,376)
(Decrease)/increase in trade and other payables 3,426 (2,267)
Net cash (used in)/generated from operating activities 3,964 1,064
Cash flows from investing activities
Purchase of intangible and tangible fixed assets (561) (106)
Net cash used in investing activities (561) (106)
Cash flows from financing activities
Interest on loans and borrowings - (690)
Payment of lease liabilities (194) (73)
Payment of lease interest (70) (61)
Net cash used in financing activities (264) (824)
Net (decrease)/increase in cash and cash equivalents 3,139 134
Cash and cash equivalents at beginning of period 15,660 19,904
Cash and cash equivalents at end of period 18,799 20,038
3,139 134
1 General Information
The principal activity of the Group is import and distribution of wine.
The Company was incorporated on 1 February 2021 in the United Kingdom and is a
public company limited by shares registered in England and Wales. The
registered office is 37-41 Roman Way Industrial Estate, Longridge Road,
Ribbleton, Preston, Lancashire, United Kingdom, PR2 5BD. The registered
company number is 13169238.
2 Significant accounting policies
Basis of preparation
The consolidated interim financial information of the Virgin Wines UK Plc
group have been prepared in accordance with the principal accounting policies
used in the Group's consolidated financial statements for the year ended 30
June 2021. These interim financial statements should be read in conjunction
with those consolidated financial statements, which have been prepared in
accordance with the international accounting standards in conformity with the
requirements of the Companies Act 2006.
These interim financial statements do not fully comply with IAS 34 'Interim
Financial Reporting', as is currently permissible under the rules of AIM.
Historical cost convention
The interim financial information has been prepared on a historical cost basis
except for certain financial assets and liabilities (including derivative
instruments), measured at fair value through the income statement.
New standards, interpretations and amendments issued not yet effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the EU that are effective in future accounting
periods that the group has decided not to adopt early.
The following standards were in issue but have not come into effect:
Amendments to
· IFRS 17 and IFRS 4, 'Insurance contracts', deferral of IFRS 9, as
amended in June 2020 - effective for the year ending 30 June 2024
· IFRS 3, IAS 16, IAS 37 (narrow scope) and some annual
improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16 - effective for the year
ending 30 June 2022
· IAS 1, Presentation of financial statements' on classification of
liabilities - effective for the year ending 30 June 2024
· IAS 1, Practice statement 2 and IAS 8 (narrow scope) - effective
for the year ending 30 June 2024
· IAS 12 - deferred tax related to assets and liabilities arising
from a single transaction - effective for the year ending 30 June 2024
· IFRS 17, 'Insurance contracts' - effective for the year ending 30
June 2024
The Directors anticipate that the adoption of planned standards and
interpretations in future periods will not have a material impact on the
financial information of the Group.
2 Significant accounting policies
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executives Statement, which also describes the financial position of the
Group.
During the period the Group met its day to day working capital requirements
through cash generated from operating activities. The Group's forecasts and
projections, taking account of reasonably possible changes in trading
performance, show that the Group should be able to operate using cash
generated from operations, and that no additional borrowing facilities will be
required.
Having assessed the principal risks, the directors considered it appropriate
to adopt the going concern basis of accounting in preparing its consolidated
financial statements.
Goodwill
Goodwill is not amortised but is reviewed annually for impairment. The
recoverable amount of the Group's single cash-generating unit (CGU) is
determined by calculating its value in use. The value in use calculation
requires the Group to estimate the future cash flows expected to arise from
the single CGU and to use a suitable discount rate in order to calculate the
present value. The value in use is then compared to the total of the relevant
assets and liabilities of the CGU. The Directors note the emerging
clarifications from the IFRS Interpretations Committee regarding how companies
should account for configuration and customisation costs relating to cloud
computing arrangements, and will continue to monitor. It is too early to
assess the likely impact.
3 Operating profit
Operating profit is stated after charging/(crediting):
Unaudited Unaudited
31 December 31 December
2021 2020
£'000 £'000
Inventory charged to cost of sales 25,419 24,998
Amortisation of intangible assets (note 7) 152 147
Depreciation of property, plant and equipment (note 8) 62 43
Depreciation of right of use asset (note 9) 250 208
Net exchange gains (including movements on fair value through profit and loss (30) (93)
derivatives)
Movement in inventory provision (58) 147
4 Share-based payments
In the period ended 31st December 2021 the Group operated an equity-settled
share-based payment plan as described below.
The charge in the period attributed to the plan was £177,000 (2020: nil).
Under the Virgin Wines UK Plc Long-Term Incentive Plan, the Group gives awards
to Directors and senior staff subject to the achievement of a pre-agreed
revenue and net profit figure for the financial year of the Group, three
financial years subsequent to the date of the award. These shares vest after
the delivery of the audited revenue and profit figure for the relevant
financial year has been announced.
Awards are granted under the plan for no consideration and carry no dividend
or voting rights. Awards are exercisable at the nominal share value of £0.01.
Awards are forfeited if the employee leaves the Group before the awards vest,
except under circumstances where the employee is considered a 'Good Leaver'.
Unaudited Unaudited
31 December 31 December
2021 2020
Shares Shares
At 1 July 433,288 -
Granted during the period 783,451 -
Outstanding at 31 December 1,216,739
The Company granted its first share options on 23 June 2021.
The awards outstanding at 31 December 2021 have a weighted average remaining
contractual life of 2.5 years.
The fair value at grant date was determined with reference to the share price
at grant date, as there are no market- based performance conditions and the
expected dividend yield is 0%. Therefore there was no separate option pricing
model used to determine the fair value of the awards.
5 Finance costs
Unaudited Unaudited
31 December 31 December
2021 2020
£'000 £'000
Investor loans - 618
Interest payable for lease liabilities 70 61
70 679
6 Earnings per share
Basic and diluted earnings per share are calculated by dividing the earnings
attributable to equity shareholders by the weighted average number of ordinary
shares in issue during the period.
The calculation of basic profit per share is based on the following data:
Statutory EPS
Unaudited Unaudited
31 December 31 December
2021 2020
Earnings (£'000)
Profit after tax 2,551 2,787
Earnings for the purpose of basic earnings per share 2,551 2,787
Number of shares
Weighted average number of shares for the purposes of basic earnings per share 55,837,560 47,617,287
Weighted average number of shares for the purposes of diluted earnings per 56,381,553 47,617,287
share
Basic earnings per ordinary share (pence) 4.6 6.0
Diluted earnings per ordinary share (pence) 4.5 6.0
7 Intangible assets
Group
Goodwill Software Total
£'000 £'000 £'000
Cost
At 1 July 2020 9,623 2,085 11,708
Additions - - -
31 December 2020 unaudited 9,623 2,085 11,708
At 1 July 2021 9,623 2,188 11,811
Additions - 337 337
31 December 2021 unaudited 9,623 2,525 12,148
Accumulated amortisation and impairment
At 1 July 2020 - 675 675
Amortisation charge - 147 147
31 December 2020 unaudited - 822 822
At 1 July 2021 - 969 969
Amortisation charge - 152 152
31 December 2021 unaudited - 1,121 1,121
Net book value
At 31 December 2021 unaudited 9,623 1,404 11,027
At 30 June 2021 audited 9,623 1,219 10,842
At 31 December 2020 unaudited 9,623 1,263 10,886
8 Property, plant and equipment
Computer hardware & warehouse equipment
Leasehold property Fixtures &
fittings Total
£'000 £'000 £'000 £'000
Cost
At 1 July 2020 20 549 233 802
Additions - 68 40 108
Disposals - (14) - (14)
31 December 2020 unaudited 20 603 273 896
At 1 July 2021 20 631 277 928
Additions - 117 70 187
Disposals - - - -
31 December 2021 unaudited 20 748 347 1,115
Accumulated depreciation
At 1 July 2020 20 460 206 686
Charge for the year - 32 11 43
Disposals - (12) - (12)
31 December 2020 unaudited 20 480 217 717
At 1 July 2021 20 516 229 765
Charge for the period - 45 17 62
Disposals - - - -
31 December 2021 unaudited 20 561 246 827
Net book value
At 31 December 2021 unaudited - 187 101 288
At 30 June 2021 audited - 115 48 163
At 31 December 2020 unaudited - 123 56 179
Depreciation is charged to operating expenses in the profit and loss account.
9 Right of use assets
Computer hardware &
Leasehold property warehouse equipment
£'000 £'000 Total
£'000
Cost
At 1 July 2020 2,423 95 2,518
Additions 1,731 - 1,731
Disposals - - -
31 December 2020 unaudited 4,154 95 4,249
At 1 July 2021 4,202 104 4,306
Additions - 39 39
31 December 2021 unaudited 4,202 143 4,345
Accumulated depreciation
At 1 July 2020 983 35 1,018
Charge for the period 201 7 208
31 December 2020 unaudited 1,184 42 1,226
At 1 July 2021 1,415 24 1,439
Charge for the period 238 12 250
31 December 2021 unaudited 1,653 36 1,689
Net book value
At 31 December 2021 unaudited 2,549 107 2,656
At 30 June 2021 audited 2,787 80 2,867
At 31 December 2020 unaudited 2,970 53 3,023
Notes to the interim financial information
for the period ended 31 December 2021
10 Trade and other receivables
Unaudited Unaudited
31 December 31 December
2021 2020
Amounts falling due within one year: £'000 £'000
Trade receivables 1,015 1,105
Taxation and social security - 2
Contract assets 915 1,137
1,930 2,244
11 Trade and other payables
Unaudited Unaudited
31 December 31 December
2021 2020
£'000 £'000
Trade payables 5,112 5,998
Taxation and social security 6,952 5,028
Contract liabilities 5,780 5,654
Accruals and other creditors 3,910 3,091
21,754 19,771
12 Share capital
Unaudited Unaudited
31 December 31 December
2021 2020
£'000 £'000
Authorised, Allotted, called up and fully paid
55,837,560 (2020: 15,687,291) ordinary shares of £0.01 each 558 156
Nil (2020: 80,000) A ordinary shares of £0.01 each - 1
Nil (2020: 30,899,252) B ordinary shares of £0.01 each - 309
Nil (2020: 950,744) C ordinary shares of £0.01 each - 10
Nil (2020: 79,200) A and B preference shares of £0.01 each - 1
558 477
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