REG - Virgin Wines UK PLC - Unaudited Interim Results
25/03/2024 07:00
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RNS Number : 0509I Virgin Wines UK PLC 25 March 2024
25 March 2024
Virgin Wines UK plc
("Virgin Wines", the "Company" or the "Group)
Unaudited Interim Results
Introduction of strategic initiatives and robust customer base underpins
triple digit bottom line growth
Virgin Wines UK plc (AIM: VINO), one of the UK's largest direct to consumer
online wine retailers, today announces its unaudited interim results for the
six months ended 29 December 2023 ("H1 2024").
Financial highlights
· Total revenue increased by 2% to £34.3m (H1 2023: £33.6m)
· Underlying EBITDA(1) up 122% to £1.76m (H1 2023: £0.75m)
· Earnings per share increased to 1.4p (H1 2023: 0.1p)
· Net cash(2) increased to £11.0m (H1 2023: £7.6m)
Strategic highlights
· H1 performance underpinned by resilient business model and
introduction of strategic initiatives
o Warehouse Wines proposition showing encouraging early results, with c.2k
customers and an 'excellent' Trustpilot rating secured
o Brand refresh complete and being rolled out across channels
o Five O'clock Somewhere Wine Club and Vineyard Collection set to launch
before year-end
· Customer base remains active and loyal, with ongoing focus on
high quality customer acquisition
o New customer conversion rate up 22% year-on-year
o Cancellation rate of the WineBank scheme at an 18 month low at 16.8%
o 14% reduction in fully costed cost per recruit
· WineBank achieved its second highest H1 revenue since inception
in 2010
o Membership up 1% to 152k
o Subscription sales up 6.5% to £20.5m
· Operational efficiency continued to improve
o Inventory reduced by 24% year-on-year
o New Warehouse Management System (WMS) operated highly effectively during
peak, and now realising expected benefits from its implementation with more to
come
o 25% reduction in warehouse fulfilment costs per case achieved
· Proactive management of costs to mitigate input pressures and
increased alcohol duty sustained gross product margin of 37.2% (H123: 36.5%)
Current trading and outlook
· Positive H1 performance in spite of cost and consumer pressure
gives confidence in ability to meet FY24 profit expectations
· The Group continues to look at opportunities to grow including
through new ventures such as Warehouse Wines, M&A fulfilling strict
criteria, and building organic growth through existing sales channels
· The Board continues to review the current Capital Allocation
policy with reference to potential M&A opportunities, dividend and share
buyback policies. Given the strong Group cash position and the current share
price, the Board has approved a limited share buyback programme starting in
the coming weeks to cover future commitments under Group share incentive
schemes. Further details will be announced in due course
(1) Underlying EBITDA is before share based payments
(2) Net cash of £11.0m is total cash of £17.4m less Wine Bank customer
deposits of £6.4m
Jay Wright, Chief Executive Officer at Virgin Wines, said:
"We are pleased to report a positive first half performance, with the
underlying business performing well including through the peak Christmas
period, and the introduction of our key strategic initiatives better
positioning the Company to achieve further growth into the future. Our
customer base remains active and loyal, with cancellation rates continuing to
trend positively despite macroeconomic uncertainties. We remain focused on
high quality customer acquisition and are pleased that our conversion rate
increased by 22% year-on-year. Our flagship WineBank offering continues to
prove popular, with the scheme achieving its second highest H1 revenue since
inception.
Looking ahead, we remain optimistic about the future prospects of the Group.
Warehouse Wines, our new proposition, has delivered encouraging early results,
bringing in almost 2,000 previously 'lapsed' customers, and we have received
positive feedback on our brand refresh. We expect a full year profit for 2024
in line with market expectations and continue to look at opportunities to
continue our growth trajectory moving forward."
Enquiries:
Virgin Wines UK plc Via Hudson Sandler
Jay Wright, CEO
Graeme Weir, CFO
Liberum Capital Limited Tel: +44 20 3100 2222
(Nominated Adviser and Sole Broker)
Edward Thomas
Dru Danford
John Fishley
Hudson Sandler virginwines@hudsonsandler.com (mailto:virginwines@hudsonsandler.com) Tel: +44
20 7796 4133
(Public Relations)
Alex Brennan
Dan de Belder
Charlotte Cobb
Harry Griffiths
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 600 wines and 100 spirits in its portfolio, which
it sells to an active customer base including over 150,000 members of its
subscription schemes. It has approximately 200 employees and a global network
of trusted winemaking partners and suppliers around the world.
The Company drives the majority of revenue though its fast-growing WineBank
subscription scheme, using a variety of marketing channels, as well as through
its Wine Advisor team, Wine Plan channel and Pay As You Go service.
Along with its extensive range of award-winning products, Virgin Wines was
delighted to be named Online Drinks Retailer of the Year for 2022 at last
year's Drinks Retailing Awards, as well as receiving the bronze award for
Contact Centre of the Year at the 2022 UK National Contact Centre Awards.
https://www.virginwinesplc.co.uk/ (https://www.virginwinesplc.co.uk/)
CHIEF EXECUTIVE'S STATEMENT
Business overview
I am pleased with our H1 2024 performance, as we made good progress across the
Company. The introduction of our strategic initiatives and the strength of the
underlying business drove a 122% year-on-year increase in EBITDA and a
reduction in warehouse fulfilment costs of 25% compared to H1 2023, further
reinforcing our consistently strong balance sheet (with an increase in net
cash from £7.6m by the end of December 2022 to £11m in December 2023).
Inventory levels also reduced, by 24% year-on-year, despite the challenging
consumer environment, highlighting the resilient and robust nature of our
business model.
It is particularly satisfying that our customers remain active and loyal, with
the rolling 12-month cancellation rate on our flagship WineBank scheme at an
18-month low and our new customer conversion rate up 22% on last year, as we
continue to prioritise driving high-quality customers through our low-cost
acquisition channels.
We also completed a brand refresh and have been delighted with the
overwhelmingly positive feedback received to date. The refresh is now being
rolled out across all sales and other communication channels, whilst the
launch of our new value proposition, Warehouse Wines, has delivered
encouraging early results.
Our buying model continues to perform well, enabling us to mitigate higher
cost pressures where possible. These include glass, bottling and packaging, as
well as the largest increase in alcohol duty in 50 years, which was
implemented in August 2023. Despite this, our mitigating actions helped to
ensure we still achieved an increase in the gross product margin, from 36.5%
in H1 2023 to 37.2% in H1 2024.
Encouragingly, costs have eased from their peak levels over the past year,
with supporting positive movements on currency. Nonetheless the careful
management of costs is an ongoing focus across the business, and we have a
cost reduction plan that will ensure we continue to cement our position as the
player with the lowest 'cost to serve' in the sector - whether that be in
operations, customer acquisition or marketing.
Trading overview
Revenue for H1 2024 increased by 2% to £34.3m (H1 2023: £33.6m) while EBITDA
increased 122% to £1.75m (H1 2023: £0.8m). The increased profit was driven
by the revenue lift, an increase in gross margins, significantly reduced
operating variables and prudent cost control in relation to our customer
acquisition. Sales from our DTC channels were up 4.5% and revenue through our
B2B business was 6.5% higher year-on-year. Sales generated through our email
and SMS marketing were particularly positive, with revenue attributable to
these channels 16% ahead of H1 2023.
Sales through our gift channel were a highlight, with revenue 17.5% ahead
year-on-year. Within this, our Christmas advent calendar campaign again proved
successful, with an 18% increase in units sold alongside a reduction in
digital advertising costs.
Our Commercial channel continues to grow, up 6% year-on-year. We saw strong
growth through corporate gifting over the Christmas period and are pleased to
have recently renewed our partnerships with both LNER and Avanti for the
supply of wines on board their trains for another two years.
Over the past six months the Group has built upon its strong cash position and
remains debt free, with the Board continuously assessing the best means to
utilise its cash position to deliver value to shareholders.
Customer acquisition
The landscape for recruiting large volumes of new customers in a cost
effective and disciplined manner remains challenging. Given that backdrop, we
continue to focus on ensuring our investments deliver high conversion rates by
concentrating on high quality customer acquisition.
Gross margins on our customer acquisition during H1 2024 doubled, to 14.1%
from 7.1% in H1 2023, and delivered a 56% increase in gross profit. This
margin increase, alongside our reduced operating costs, helped deliver a
reduction in the fully costed cost per recruit of 14%.
Our strategy of focusing on quality recruits also led to a 22% increase in the
new customer conversion rate, from 41.1% in December 2022 to 50% in December
2023. This, coupled with the positive reduction in the cancellation rate for
our WineBank scheme, led to a 1% increase in the total membership of our
subscription schemes, to 152k.
WineBank subscription scheme and customer behaviour
Our flagship WineBank subscription scheme produced a robust performance, with
memberships increasing by 1% and sales up 6.5% to £20.5m, the second highest
H1 revenue from WineBank customers since its inception. Total revenue
generated through our WineBank members is now 75% higher than in H1 2020,
highlighting the growth in its popularity and the effects of significant
marketing around the scheme underpinning the progress that has been achieved
over the past four years.
In addition, the 12-month rolling cancellation rate reduced from 17.8% in
December 2022 to 16.8% in December 2023, reflecting the loyalty of the
customer base and the initiatives that have been implemented to boost
retention rates.
WineBank customer deposits totalled £6.4m at the end of December 2023, down
from a high of over £9m at the end of October as customers became more active
during November and December. All customer deposits are held in a separate
client account and are not used to fund the business or our working capital
requirements.
The key limiting factor on more substantial revenue growth is the relatively
subdued order frequency rate that has reduced over the past two years, from
circa four cases per annum per customer to nearer three cases. However, we are
starting to see early signs that this has bottomed out and is beginning to
trend more positively, borne out by the increase in the sales retention rate
from 80% in H1 2023 to 91% in H1 2024. We are also encouraged by the ongoing
loyalty of the customer base, as members remain active and we are confident
that, as consumer confidence starts to rise, we will see a return to a higher
frequency of purchase.
We continue to receive excellent reviews from customers for both our service
levels and the quality of our wines. Our Trustpilot score is rated as
'excellent' at 4.4 stars with over 17,000 five-star reviews. Similarly, our
customer wine ratings continue to average over 4 out of 5 and the feedback we
receive from our members continues to be a vital component of how we develop
our wine ranges from vintage to vintage.
Operations
Our warehouse management system operated highly effectively during the peak
2023 Christmas period and we are now realising considerable benefits from its
implementation. The cost per case for fulfilment in our distribution centres
reduced by 25% year-on-year, and we delivered the highest levels of customer
service over the peak period with a continuous ability to despatch orders
placed by 4pm for next day delivery.
We still believe there are further efficiencies to be driven by the new WMS
and we continue to work hard to deliver these future cost benefits.
The total operating variable per case reduced by 11% over H1 2024 despite a
10% increase in the national living wage for both our customer service and
warehouse teams, and cost pressure on courier rates through fuel surcharges
and packaging.
Buying strategy
In August 2023, the wine sector in the UK was subjected to the largest single
rise in alcohol duty, increasing the cost of wines with an alcohol level
between 11.5% and 14.5% from £2.23 a bottle to £2.67. This 20% increase,
which affects the vast majority of wine and does not include VAT, comes at a
time when customers have been particularly price sensitive.
We are fortunate that our open source buying model has allowed us to partially
mitigate the effects of this duty change by enabling us to quickly switch
supply to countries and regions that are delivering the very best
quality/value ratios in the short term, whilst also working with our global
network of winemakers to focus on creating a larger portfolio of lower alcohol
wines. Nonetheless, it is not possible to deliver a substantial quantity of
wines at 11% abv and below, particularly with red wines and wines from hotter
climates.
In the meantime, the excellent work of the buying team has helped us to remain
competitive on pricing whilst maintaining quality levels and delivering
increased gross product margins. We were delighted that our Head Buyer, Sophie
Lord, was recognised throughout the industry as 'UK Buyer of the Year' at this
year's Decanter Retailer Awards, and the whole buying team has been
short-listed for 'Best Buying Team' at the forthcoming London Wine Fair.
New strategic initiatives
We continue to make good progress on the introduction of a number of new
strategic initiatives, and we were pleased to launch our new value
proposition, Warehouse Wines, in late October 2023 alongside the ongoing
roll-out of our new brand refresh.
We tested the Warehouse Wines proposition with a number of Virgin Wines
'lapsed' customers, offering access to a brand that delivered everyday low
pricing in the £6.49-£8.99 per bottle price range on excellent quality wines
without any ongoing subscription scheme. The initial launch has been
encouraging, with just under 2k customers taking up a Warehouse Wines offer, a
4.4 'excellent' rating on Trustpilot and customer wine ratings at over 4 out
of 5, in keeping with those of the core Virgin Wines brand.
More widely, the customer feedback from the initial stage of the brand refresh
has been wholly positive, and we continue to roll this out across our
different channels. The launch of our Five O'clock Somewhere Wine Club that
features outstanding, small batch, boutique wines, handcrafted in McLaren Vale
in Australia is imminent, and the initial batch of wines that we have
developed for our Vineyard Collection, using our own winemaking expertise and
vineyard plots in the South East of England, France, South Africa and
Australia are due to be launched in Q4 2024.
Current trading and outlook
We have been encouraged by both the operational performance and level of
profit generated in the first half of the year, which has given us a solid
platform moving into H2 2024. Whilst the consumer environment remains
challenging, we remain confident that we will deliver a positive year-on-year
performance and achieve full year profit in line with our expectations.
January and February are typically the quietest months of the year in our
sector. However, March has returned to a more normal level of trading and we
look forward to continuing this and delivering year-on-year growth over Q4
2024.
Cost pressures continue and the Board is continuously looking at a variety of
ways to reduce costs and maintain our position as being the lowest cost to
serve in the DTC wine sector. We also recognise the need to be competitive on
pricing and to drive volume in an environment with significant cost inflation.
Ensuring we continue to have a cost structure appropriate to the current
trading environment, as well as allowing the sales channels to have the
flexibility on product margins to deliver growth, is an ongoing focus.
The Group continues to look at opportunities to grow, whether that be
investing in its new ventures such as Warehouse Wines, considering any M&A
opportunities that may fulfil the strict criteria the business would require,
or building on the organic growth of its existing sales channels.
FINANCIAL REVIEW
Profit before tax
Profit before tax was £1.1m (H123: £0.1m), reflecting the recovery in
performance in H1 2024.
Revenue
Group revenue increased by 2% in H1 2024, to £34.3m (H123: £33.6m). This was
underpinned by the resilience of our main subscription scheme, WineBank, where
revenue was up by £1.3m, or 6.5%, year-on-year.
Gross profit
Reported Gross profit margin increased by 2% to 31.1% (H123: 29.1%). Reported
Gross Profit margin includes the cost of wine, duty, packaging and delivery
costs. Product margins excluding packaging and delivery also increased, to
37.2% (H123: 36.5%).
Exceptional one-off expenses
Exceptional one-off expenses in H1 2024 totalled £0m (H123: £616k). The
prior year included exceptional costs relating to the implementation of the
Warehouse Management System in September 2022. These were disclosed separately
due to their scale and one-off nature.
EBITDA
Underlying EBITDA before share based payments was up £965k, or 122%, to
£1.755m (H123: £790k).
Share based payments
The Group provided for a share-based payment expense of £137k (H123: £89k),
relating to the share based long-term incentive plan for the leadership team.
These charges have been added back into the underlying EBITDA.
Finance income
Finance income of £161k (H123: £52k) related to bank interest earned on cash
balances.
Finance expenses
Finance expenses of £80k (H123: £89k) related to the interest charge for
Right of Use Assets. The Group has no borrowings so there are no expenses
relating to servicing overdrafts or loans.
Earnings per share
Basic and Diluted Earnings per share increased to 1.4p in H1 2024, from 0.1p,
due to a substantial increase in Profit after Tax to £801k (H123: £73k).
Dividend
The Board is not recommending the payment of an interim dividend, but 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
Closing Inventory was down by 24% from the prior year, to £8.4m (H123:
£11m). We continue to monitor the wine range and supply chain to ensure we
optimise the carrying value of inventories.
Cash
Gross cash at the period end was £17.4m (H123: £14.1m). The Group monitors
net cash after deducting WineBank customer deposits. The net cash in hand
excluding WineBank deposits was up £3.4m to £11.0m (H123: £7.6m). WineBank
deposits are ringfenced and are not used to fund stock purchases or working
capital.
Jay Wright
Chief Executive Officer
25 March 2024
Results Summary
Unaudited Unaudited
29-Dec 31-Dec
£000's 2023 2022
Revenue 34,286 33,627
Gross Profit 10,654 9,774
Gross Profit % 31.1% 29.1%
Underlying operation expenses (8,899) (8,984)
Underlying EBITDA 1,755 790
Profit before tax 1,057 90
Net Assets 22,760 22,235
Cash and cash equivalents 17,412 14,128
Underlying EBITDA excludes share based payments
Virgin Wines UK Plc
Condensed consolidated statement of comprehensive income
for the period ended 29 December 2023
Unaudited Unaudited
29 December 30 December
Note 2023 2022
£'000 £'000
Revenue 34,286 33,627
Cost of sales (23,632) (23,853)
Gross profit 10,654 9,774
Operating expenses (9,678) (9,647)
Operating profit 3 976 127
Finance income 5 161 52
Finance costs 6 (80) (89)
Profit before taxation 1,057 90
Taxation (256) (17)
Profit for the financial period and total comprehensive income 801 73
Basic and diluted earnings per share (pence) 7 1.4 0.1
Virgin Wines UK Plc
Condensed consolidated statement of financial position
as at 29 December 2023
Unaudited Unaudited Audited
29 December 30 December 30 June
2023 2022
Note 2023
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 8 11,145 11,424 11,350
Property, plant and equipment 9 306 487 402
Right of use assets 10 2,620 3,007 2,870
Deferred tax asset 240 411 496
Total Non-current assets 14,311 15,329 15,118
Current assets
Inventories 8,400 11,046 8,367
Trade and other receivables 11 2,689 2,484 2,615
Derivative financial instruments 6 26 -
Cash and cash equivalents 17,412 14,128 13,514
Total current assets 28,507 27,684 24,496
Total assets 42,818 43,013 39,614
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 12 (16,718) (17,074) (14,206)
Derivative financial instruments - - (12)
Lease liability (534) (527) (521)
Loans and borrowings - - -
Total current liabilities (17,252) (17,601) (14,739)
Non-current liabilities
Provisions (344) (313) (321)
Lease liability (2,462) (2,864) (2,732)
Total non-current liabilities (2,806) (3,177) (3,053)
Total liabilities (20,058) (20,778) (17,792)
Net assets 22,760 22,235 21,822
Equity
Share capital 13 558 558 558
Share premium 11,989 11,989 11,989
Own share reserve - (36) -
Merger reserve 65 65 65
Other reserve 539 184 402
Retained earnings 9,609 9,475 8,808
Total Equity 22,760 22,235 21,822
Virgin Wines UK Plc
Condensed consolidated statement of changes in equity
for the period ended 29 December 2023
Called up Own share Total Shareholders'
share capital Share premium reserve Merger reserve Other reserve Retained earnings funds
£'000 £'000 £'000 £'000 £'000 £'000
2 July 2022 558 11,989 (36) 65 95 9,402 22,073
Profit for the financial year - - - - - 73 73
Share-based payments - - - - 89 - 89
30 December 2022 unaudited 558 11,989 (36) 65 184 9,475 22,235
1 July 2023
558 11,989 - 65 402 8,808 21,822
Profit for the financial year - - - - - 801 801
Share-based payments - - - - 137 - 137
29 December 2023 unaudited 558 11,989 - 65 539 9,609 22,760
Virgin Wines UK Plc
Condensed consolidated statement of cash flows
for the period ended 29 December 2023
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Cash flows from operating activities
Profit before taxation 1,057 90
Adjustments for:
Depreciation and amortisation 642 573
Net finance costs (81) 37
Share-based payment 137 89
Decrease/(increase) in trade and other receivables (80) (17)
Increase in inventories (33) (2,393)
(Decrease)/increase in trade and other payables 2,522 1,647
Net cash (used in)/generated from operating activities 4,164 26
Cash flows from investing activities
Interest received 161 52
Purchase of intangible and tangible fixed assets (90) (716)
Net cash used in investing activities 71 (664)
Cash flows from financing activities
Payment of lease liabilities (257) (215)
Payment of lease interest (80) (89)
Net cash used in financing activities (337) (304)
Net (decrease)/increase in cash and cash equivalents 3,898 (942)
Cash and cash equivalents at beginning of period 13,514 15,070
Cash and cash equivalents at end of period 17,412 14,128
3,898 (942)
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 2023. 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.
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.
3 Operating profit
Operating profit is stated after charging/(crediting):
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Inventory charged to cost of sales 21,575 21,416
Amortisation of intangible assets (note 8) 272 209
Depreciation of property, plant and equipment (note 9) 120 109
Depreciation of right of use asset (note 10) 250 255
Net exchange gains (including movements on fair value through profit and loss (22) 8
derivatives)
Movement in inventory provision (38) (35)
4 Share-based payments
In the period ended 29th December 2023 the Group operated an equity-settled
share-based payment plan as described below.
The charge in the period attributed to the plan was £137k (H1 2023: £89k).
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
29 December 30 December
2023 2022
Shares Shares
Outstanding at start of period 2,811,645 1,216,739
Granted during the period - 2,366,798
Outstanding at end of period 2,811,645 3,583,537
The Company granted its first share options on 23 June 2021. Further share
options were granted on 6 December 2021 and 6 December 2022.
The awards outstanding at 29 December 2023 have a weighted average remaining
contractual life of 1.4 years (30 December 2022: 2.2 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 income
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Bank interest 161 52
6 Finance costs
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Interest payable for lease liabilities 80 89
7 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
29 December 30 December
2023 2022
Earnings (£'000)
Profit after tax 801 73
Earnings for the purpose of basic earnings per share 801 73
Number of shares
Weighted average number of shares for the purposes of basic earnings per share 55,837,560 55,837,560
Weighted average number of shares for the purposes of diluted earnings per 58,649,205 57,054,299
share
Basic and diluted earnings per ordinary share (pence) 1.4 0.1
8 Intangible assets
Group
Goodwill Software Total
£'000 £'000 £'000
Cost
At 2 July 2022 9,623 2,781 12,404
Additions - 520 520
30 December 2022 unaudited 9,623 3,301 12,924
At 1 July 2023 9,623 3,480 13,103
Additions - 67 67
29 December 2023 unaudited 9,623 3,547 13,170
Accumulated amortisation and impairment
At 2 July 2022 - 1,291 1,291
Amortisation charge - 209 209
30 December 2022 unaudited - 1,500 1,500
At 1 July 2023 - 1,753 1,753
Amortisation charge - 272 272
29 December 2023 unaudited - 2,025 2,025
Net book value
At 29 December 2023 unaudited 9,623 1,522 11,145
At 30 June 2023 audited 9,623 1,727 11,350
At 30 December 2022 unaudited 9,623 1,801 11,424
9 Property, plant and equipment
Computer hardware & warehouse
equipment
Leasehold property Fixtures &
fittings Total
£'000 £'000 £'000 £'000
Cost
At 2 July 2022 20 899 385 1,304
Additions - 71 125 196
30 December 2022 unaudited 20 970 510 1,500
At 1 July 2023 20 980 538 1,538
Additions - 9 15 24
29 December 2023 unaudited 20 989 553 1,562
Accumulated depreciation
At 2 July 2022 20 612 272 904
Charge for the year - 63 46 109
30 December 2022 unaudited 20 675 318 1,013
At 1 July 2023 20 750 366 1,136
Charge for the period - 69 51 120
29 December 2023 unaudited 20 819 417 1,256
Net book value
At 29 December 2023 unaudited - 170 136 306
At 30 June 2023 audited - 230 172 402
At 30 December 2022 unaudited - 295 192 487
Depreciation is charged to operating expenses in the profit and loss account.
10 Right of use assets
Computer hardware & warehouse equipment
Leasehold property
Total
£'000 £'000 £'000
Cost
At 2 July 2022 5,060 143 5,203
30 December 2022 unaudited 5,060 143 5,203
At 1 July 2023 5,060 252 5,312
29 December 2023 unaudited 5,060 252 5,312
Accumulated depreciation
At 2 July 2022 1,891 50 1,941
Charge for the period 241 14 255
30 December 2022 unaudited 2,132 64 2,196
At 1 July 2023 2,357 85 2,442
Charge for the period 225 25 250
29 December 2023 unaudited 2,582 110 2,692
Net book value
At 29 December 2023 unaudited 2,478 142 2,620
At 30 June 2023 audited 2,703 167 2,870
At 30 December 2022 unaudited 2,928 79 3,007
11 Trade and other receivables
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Amounts falling due within one year:
Trade receivables 1,591 1,562
Contract assets 966 922
Other receivables 132 -
2,689 2,484
12 Trade and other payables
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Trade payables 4,648 4,674
Taxation and social security 3,119 3,440
Contract liabilities 6,548 6,734
Accruals and other creditors 2,403 2,226
16,718 17,074
13 Share capital
Unaudited Unaudited
29 December 30 December
2023 2022
£'000 £'000
Authorised, Allotted, called up and fully paid
55,837,560 (2022: 55,837,560) ordinary shares of £0.01 each 558 558
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