REG - Xpediator PLC - Final Results
23/05/2023 07:00
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RNS Number : 2685A Xpediator PLC 23 May 2023
23 May 2023
XPEDIATOR PLC
("Xpediator", the "Company" or the "Group")
FINAL RESULTS
Xpediator Plc (AIM: XPD), a leading provider of freight management services
across the UK and Central and Eastern Europe, is pleased to announce its
audited final results for the twelve months ended 31 December 2022.
2022 Financial Highlights
· Significant organic growth with Group revenue increasing 30% to a
record performance of £386.7m (2021: £296.6m) with a particularly strong
contribution from the Group's largest division, Freight Forwarding.
o Freight Forwarding delivered revenue of £312.7m, an increase of 34%.
o Warehouse & Logistics delivered revenue of £65.6m, an increase of
16%.
o Transport Support Services delivered revenue of £8.4m, an increase of
35%.
· Adjusted profit before tax of £11.0m, up 21% (2021: £9.1m). *
· Reported profit before tax of £6.5m (2021: £4.3m).
· Adjusted basic earnings per share of 3.03 pence (2021: 3.68
pence).
· Basic loss per share of (0.13) pence (2021: earnings per share
0.29 pence).
· Net cash generated from operating activities was £17.7m (2021:
£4.7m).
· Net debt position of £3.6m (2021: net debt of £4.8m) improved
due to strong trading across the Group, particularly in Delamode Baltics, but
also as a result of greater focus on turning around the loss-making UK
entities
2022 Operational Highlights
· Continued exceptional performance in the Freight Forwarding
Division, especially in the Baltic region, the largest region for the Group in
terms of revenue and profit.
· Profitable performances by both the Transport Support Services
and Romanian Warehouse & Logistics Divisions helped the Group achieve a
particularly strong second half performance.
· The UK Logistics Division, underwent significant change during
the period, including post year end, the closure of the Beckton warehouse.
Recommended Cash Offer
· On 6 April 2023, Xpediator announced a recommended cash offer by
DLM Bidco Limited, of 44p per share comprising 42p in cash and a special
dividend of 2p (the "Offer").
· Under the terms of the Offer, a loan note alternative will be
available to eligible shareholders, which will enable them to elect to receive
loan notes in lieu of part or all of the cash consideration to which they
would otherwise be entitled under the terms of the Offer.
· The Xpediator Directors, who have been so advised by Zeus Capital
(financial adviser to Xpediator) as to the financial terms of the Offer,
consider the terms of the Offer to be fair and reasonable.
· Shareholder meetings will be held on 7 June 2023 at which
eligible shareholders will vote on the proposed Offer.
*Adjusted profit before tax is set out in Chief Financial Officer's report and
includes adjustments for the amortisation of intangibles, impairment, the
impact of the application of IFRS16 and exceptional items.
Xpediator plc Tel: +44 (0)330 043 2395
Graham Moore, Interim Chief Operating Officer
Richard Myson, Chief Financial Officer
Zeus (Nominated Adviser & Broker) Tel: +44 (0)20 3829 5000
David Foreman, James Hornigold, Ed Beddows (Investment Banking)
Dominic King (Corporate Broking)
Novella Communications (Financial Public Relations) Tel: +44 (0)20 3151 7008
Tim Robertson
Safia Colebrook
About Xpediator:
Xpediator is a well-established international provider of freight management
services. Established in 1988, the Group's international network of offices
provides road, sea and air freight services, together with logistics and
warehousing in the UK and Romania. The business offers integrated freight
management within the supply chain logistics and fulfilment sector, through
its three main areas: freight forwarding, logistics & warehousing and
transport services. With headquarters in Braintree, Essex and country offices
in nine CEE countries across 34 sites, the Group currently employs over 1,400
people and was successfully listed on London's AIM market in 2017.
For more information, please visit: www.xpediator.com
(http://www.xpediator.com/) .
Alternatively, do follow us on Twitter at @Xpediator
(https://twitter.com/Xpediator) or find us on LinkedIn at Xpediator Plc
(https://www.linkedin.com/company/11135238/) .
Interim Chairman's Statement
Introduction
I am pleased to present these results for the 12 months to 31 December 2022.
The Group generated revenues of £386.7m, a 30% increase over the prior year
and adjusted profit before tax of £11.0m, up 21%. Statutory profit before tax
was £6.5m, up 52%. An excellent performance and further enhanced by the
progress made with reducing net debt, being £3.6m at 31 December 2022
substantially down from the £8.0m at 30 June 2022.
Trading has begun positively in 2023 and we expect the business to continue to
grow throughout the current year. At the same time, we remain aware of
potential challenges. To date, we have managed to offset any reduction in
trade due to the conflict in Ukraine with sales increases in other markets,
and whilst globally markets remain challenging, we will continue to operate
within our capabilities and not over extend ourselves.
Recommended Offer
On 4 May 2023, the Board recommended an Offer from DLM Bidco Limited (a newly
incorporated entity indirectly owned by a consortium comprising the Company's
largest shareholder, Cogels Investments Limited ("Cogels"), the investment
vehicle of close family members of Stephen Blyth (former CEO of Xpediator),
funds managed by Baltcap, one of the largest private equity investors in the
Baltic states, and Justas Versnickas, the Managing Director of, and 20%
shareholder in, Delamode Baltics, a subsidiary of Xpediator) to acquire the
entire issued, and to be issued, share capital of the Company. The Offer
comprises 42p cash per share ("Cash Offer") and a special dividend of 2p which
values the Company at approximately £62.3m. Under the terms of the Offer, a
loan note alternative will be available to eligible shareholders, which will
enable them to elect to receive loan notes in lieu of part or all of the cash
consideration to which they would otherwise be entitled under the terms of the
Offer. The shareholder meetings for eligible shareholders to approve the Offer
(being structured as a Scheme of Arrangement) are scheduled for 7 June 2023.
Our people
As ever, it is the people within the business who drive its success. We know
this and we have worked to increase our focus and investment in individuals
and provide collaborative work environments. Our objective remains for the
Group to be seen as an employer of choice. We believe that employee
satisfaction continues to improve and through our employee surveys we are
listening to our teams and making their input part of the future changes we
make.
2022 was a successful year for the business and on behalf of the Board I would
like to thank everyone in the business for their significant contributions.
Board and management changes
During the year there were several changes to the Board. In March, Mark
Whiteling, Non-executive Chairman, and Stephen Blyth, Non-Executive Director
("NED") and Founder, stepped down from the Board. Rob Riddleston stepped in as
Interim Chairman from 25 March to 1 June 2022. In June, Richard Myson
re-joined the Company as Chief Financial Officer having previously worked for
the Group for 16 years, replacing Mike Williamson the outgoing Chief Financial
Officer. Mike Stone joined as Interim Chief Executive and I joined as Interim
Non-Executive Chairman. Mike Stone replaced Wim Pauwels who had stepped in
from his NED role to Interim Chief Executive. Wim left the Company on 31 May
2022. On 6 April 2023, Mike Stone advised the Board of his intention to step
down from his role of Interim Chief Executive and from the Board before the
Offer completes but no specific effective date has yet been agreed.
Operational targets
From June 2022, the new management team reviewed the entire business and
concluded that while the majority of the Group was performing well and driving
growth for the business as a whole, there were some key areas of
underperformance. The second half of 2022 was successfully focused on
addressing these issues.
The first objective was to reduce the level of net debt which at 30 June 2022
was £8.0 million and needed to come down to a more sustainable level which we
have achieved already and the goal remains to move close to a net cash
position by the end of 2023.
The business review also highlighted the opportunity to achieve greater
operational efficiencies across the business and reduce the cost base of the
Group, without impacting the quality of service we provide to our customers.
This process is well advanced and is already generating material savings.
From a trading perspective, the UK businesses have lagged the performance of
those on the Continent for some time both in Freight Forwarding and Logistics.
UK Freight Forwarding has over the last six months improved under the
leadership of Justas Versnickas, MD of Delamode Baltics UAB. Similarly, under
Alberto Romero, Head of UK Logistics, this division has been restructured
including the closure of the Beckton warehouse and is now on a much-improved
footing, albeit with continual assessment of warehousing performance and with
other remedial actions available that can be taken as required.
Dividend
The Board is not recommending a final dividend to be paid to shareholders, and
no interim dividend was paid during the year. In 2021 a total dividend of
1.10p per share was paid.
However, pursuant to the Offer and conditional upon shareholder approval and
the Offer completing, a special dividend of 2p per share will be paid by the
Company, further details as to the timing of which will be provided in due
course.
Outlook
The business has good foundations and the changes that have occurred in the
last nine months, have further enhanced the business base. While cognisant of
the wider market environment and the ongoing volatility that is occurring in
different parts of the marketplace, transportation and storage of goods will
continue to be required. Notwithstanding the Offer to purchase the share
capital of the business and the potential change in ownership, we believe the
Group continues to be well placed to grow.
Operational Statement
Introduction
The Board are happy to report that the Group is in good health. During 2022,
the business has grown, the operational team have worked well together to
bring in some important changes which we believe will deliver benefits to the
Group over the medium to longer term. Most importantly, we continue to offer a
professional and highly efficient service to our thousands of customers across
the globe, ensuring their goods are transported and stored safely, securely
and cost effectively.
The business generated close to £400 million in annual sales, another target
achieved by the team. 71% of revenues came from the continent with the balance
of 29% coming from the UK. Our largest and most profitable business continues
to be our Freight Forwarding operation in Lithuania. Led by Justas Versnickas,
this division has been a core driver of the Group's success together with
strong trading performances from the Baltic and Balkan regions as a whole.
It has been clear from the outset that there is potential for the UK
businesses to make a much greater contribution to the Group. Both UK Freight
Forwarding and UK Logistics have underperformed their potential and in the
case of Logistics have been a drag on profitability. Significant change
requires time to implement and take effect but over the last 9 months we have
made some important changes in the UK which we believe will result in both
areas making significant long-term improvements.
UK Logistics which has been loss-making for some time, has been fundamentally
restructured under the leadership of Alberto Romero. The loss making high
street fashion warehouse in Beckton, covering 70,000 sq ft, has been returned
to the landlord at the end of our lease period with key warehouse customers
transferring their business to our warehouse in Braintree which is not yet
running to capacity but is moving in the right direction. This, together with
the implementation of a new Warehouse Management System in the recently
developed 235,000 sq ft dockside warehouse in the port of Southampton, has
improved the financial performance and future of the UK Logistics division.
Positive trading and better cost control enabled the Group to reduce net debt
to £3.6 million as at 31 December 2022. A significant reduction down from
£8.0 million as at 30 June 2022. The Group's indebtedness was a key issue for
the business, but it is now under control and whilst further improvements are
required, the goal to be cash positive during 2024 is achievable.
Health & Safety
Health and Safety receives strategic focus and priority on a daily basis. We
are proud of the fact that there were no significant injuries reported in 2022
and will continue to ensure health and safety receives significant attention
throughout the Group.
Operational Review
Our strategy remains focused around building a scalable and risk adjusted
platform to support our freight management companies across the UK and Europe
with a particular expertise in Central and Eastern Europe ("CEE").
Divisional Review
Freight Forwarding
Overall, the Freight Forwarding division has performed well with an
exceptional performance delivered by Baltics and strong performances from
Bulgaria and Regional Express.
Revenue £312.7m (2021: £233.6.m)
Operating profit £12.6m (2021: £9.7m)
Operating predominately under the Delamode brand, this division specialises in
international freight management services via road, sea, air and rail
connecting CEE countries and the UK with each other and the rest of Europe.
Revenues across the Baltics and Balkans continued to grow significantly
against prior year comparatives, with Baltics revenue up by £65.0 million, a
71% increase year on year, and Bulgaria up by £8.3 million, a 25% increase.
Both businesses benefitted from the global increase in sea freight rates plus
the development of new routes. Profit before tax in the Baltics increased by
£8.9 million to £15.9 million (2021: £7.0 million) and in Bulgaria by £0.2
million to £1.5 million (2021: £1.3 million). In addition, both Serbia and
Estonia delivered a strong performance as these businesses continue to mature
with revenue up 20% and 27% respectively.
Delamode Anglia, the largest UK freight forwarding business, struggled in 2022
as a consequence of the integration of the two acquired business into the main
forwarding entity, which resulted in revenue decreasing by £10.7 million year
on year. Improvements in performance have been seen in 2023. Regional Express
and Delamode Nidd, which both trade independently, saw profits increase.
Warehousing & Logistics
Warehousing & Logistics division generated good revenue growth led by
Pallex Romania.
Revenue £65.6m (2021: £56.7.m)
Operating profit £0.7m (2021: £1.5m)
The Group's warehousing capacity in the UK, Romania and Bulgaria offers
comprehensive services in strategically situated sites. Although revenues for
this division increased year on year profitability was reduced attributable to
the warehousing operations in the UK.
Good trading performances from Pall-Ex and Logistics in Romania drove an
overall increase in revenues for this division,
UK warehousing also generated an increase in revenue, up £5.1m due to the
full year operation of the new facility in Southampton. Profitability reduced
significantly however, primarily due to the challenges faced by the retail
focused Beckton warehouse and reduced occupancy in the Braintree warehouse.
The Group's Pall-Ex franchise in Romania continues to perform strongly,
offering a palletised freight delivery service to any part of the country
within 24 hours and handling in excess of 90,000 pallets on average per month.
Transport Support Services
Transport Support Services operating under the Affinity brand continues to go
from strength to strength under the leadership of strong and innovative local
management. The existing product offering is well established and continues
to be improved through digitalisation and innovation.
Revenue £8.4m (2021: £6.3m)
Gross billing £189.6m (2021: £145.9m)
Operating profit £2.7m (2021: £2.4m)
Affinity, provides bundled fuel and toll cards, financial and support services
for hauliers in Southern Europe. Affinity has been an agent of DKV in Romania
since 2002, one of the world's largest fuel card providers and provides the
DKV fuel card across the Balkans to a database of approximately 2,400 Eastern
European hauliers.
In addition, Affinity provides a "one stop shop" of transport services
including roadside assistance and ferry bookings. Affinity's commercial model
fits well within the Group as many of the hauliers who are customers of
Affinity also supply haulage services to Delamode a key factor that enables
the Group to have a good understanding of its customers and suppliers, which
underpins the strategy to provide further financial services such as insurance
and leasing. With continued driver shortages in Europe, having a haulage
supplier base is increasingly important for the Freight Forwarding division.
Volumes sold to customers (gross billings) increased in 2022 by 30% year on
year, mainly due to the increase in the average fuel cost per litre, which
increased by 24% year on year.
Romania remains the largest region for the division representing 78% of total
activity in terms of gross billings (2021: 79%). The Balkans operation
continues to grow leveraging the relationships with the Freight Forwarding
businesses based in Bulgaria and Serbia.
In 2022 Affinity expanded its product offering with the development of the
financial services provision tailored specifically for its existing customer
base.
Affinity's 20 years of experience and well-established leadership team
provides a good platform to expand in new geographical regions, as well as
being well placed to further develop its service and product offerings.
Richard Myson
Chief Financial Officer
2022 financial results improved over 2021 on the back of enhanced revenue.
Revenue
Group revenue increased in 2022 by £90.1 million (30.3%) to £386.7 million.
The Freight Forwarding Division delivered £312.7 million (33.9% increase from
2021), the Warehousing and Logistics Division revenue of £65.6 million (15.5%
increase from 2021) and the Transport Support Services Division delivered
£8.4 million (34.5% increase from 2021).
Segment Profit Before Central Overhead Allocation and Exceptional Items
This definition of profit performance is presented to provide a clear view of
underlying trading activities and to ensure consistency with previous
reporting and commentary.
Operating profit of the Freight Forwarding Division increased by £2.9 million
to £12.6 million largely driven by increased activity in Baltics region.
Operating profit of the Warehouse and Logistics Division decreased by £0.8
million to £0.7 million mainly due to the reduction in volumes in the UK and
overstaffing to accommodate expected volumes in Southampton which were
delayed.
The Transport Support Services Division's operating profit increased by £0.3
million to £2.7 million.
Group Profit before Taxation
Group profit before tax increased in 2022 to £6.5 million (2021: £4.3
million) driven by the Freight Forwarding Division.
A summary of operating profit before central overhead allocation by division
is shown below:
2022 2021 2020 2019 2018 2017
Freight Forwarding £12.6m £9.7m £6.8m £3.4m £3.0m £2.4m
Warehouse and Logistics £0.7m £1.5m £2.6m £2.9m £3.0m £0.9m
Transport Support Services £2.7m £2.4m £2.3m £2.5m £2.3m £2.0m
Adjusted Profit before Tax
This table sets out the adjustments made to the profit before tax to show an
underlying trading profit performance and establish consistency in reporting
from prior periods and arrive at an adjusted profit before tax:
2022 2021 2020 2019 2018 2017
Profit Before Tax £6.5m £4.3m £3.9m £2.2m £5.6m £2.4m
Exceptional Items (note 27) £0.5m £2.6m £1.4m £0.9m £0.3m £0.9m
Net unwind and addback of discount on deferred consideration/Benfleet vendor - £0.1m £0.3m £0.2m £0.3m
income (note 8)
-
Amortisation of intangibles on acquisition (note 12) £1.5m £1.5m £1.5m £1.4m £1.1m £0.4m
Impairment (note12) £1.5m - - - - -
Net Income Statement Impact of application of IFRS 16 £0.7m £0.3m £0.3m - -
£1.0m
Adjusted profit before tax £11.0m £9.1m £7.2m £5.1m £7.2m £4.0m
Earnings per Share
2022 2021 2020 2019 2018 2017
Basic (Loss)/Earnings Per Share (0.13) 0.29 1.46 0.60 3.53 1.64
Adjusted Earnings Per Share 3.03 3.68 3.84 2.80 4.80 3.27
The total number of ordinary shares as at 31 December 2022 was 141.7 million
(2021: 141.7 million).
(Loss)/Profit after tax attributable to the owners of the parent company of
£(0.2) million (2021: £0.4 million) provides a basic earnings per share of
(0.13)p (2021: 0.29p). Adjusted profit before tax results in basic and diluted
earnings per share of 3.03p and 3.03p respectively (2021: basic and diluted
3.68p, 3.67p) (see note 10 of the financial statements).
Financial Resources
Asset Cover 2022 2021 2020 2019 2018 2017
Total Assets £237.8 £196.1m £138.2m £128.9m £98.8m £76.4m
£31.2m £29.0m £29.1m £14.8m
Net Assets £31.9m £29.2m
Current Ratio 1.05 0.99 1.05 1.01 1.14 1.07
A current ratio of 1.05 for 2022 shows an improvement over 2021 of 0.99.
Cash
The Group traditionally has been an asset light, cost conscious and cash
generative entity and the focus of the Board has been to restore this strategy
in H2 of 2022.
By improving the performance of Delamode Anglia and the UK Logistics business,
controlling the under-recovered costs in the centre, together with the
increased profits generated in the Baltics, the Group improved the cash
position from H1 to end the year with a net debt position of £(3.6)m, down
from 30 June 2022 of £(8.0)m and £(4.6)m as at 31 December 2021.
The Board continues to monitor cash regularly to ensure the financing needs of
the business are met and expects these to be achieved for the coming year from
existing cash balances, current funding facilities and operating cash flows.
The Group has sufficient financial resources and a broad spread of business
activities. The Directors therefore believe that it is well placed to manage
its business risks.
Cash 2022(1) 2021 2020 2019 2018(2) 2017(2)
Net cash from operating activities £17.7m £4.7m £14.1m £14.2m £9.5m £3.9m
Net cash outflow from investing activities £(2.2)m £(3.1)m £(6.0)m £(2.0)m £(7.0)m £(6.5)m
Net cash (outflow)/inflow from financing activities £(16.4)m £(1.5)m £(7.8)m £(9.3)m £(0.4)m £4.8m
Effect of foreign exchange movements £1.5m £(1.1)m £0.4m £(0.5)m £0.2m £(0.1)m
Cash and cash equivalents at end of year £12.2m £11.7m £12.7m £12.0m £9.6m £7.3m
(1) Cash and cash equivalents at end of year includes overdrafts of £879,000.
(2) Comparatives for 2017 and 2018 have been restated for consistency with the
reporting under IFRS 16. Previously, the cashflow for operating leases was
reported within net cash from operating activities (2018, £5.9m, 2017 -
£2.2m), but are now reported in net cash outflow from financing activities.
Working Capital
Trade Receivables and Payables 2022 2021 2020 2019 2018 2017
Trade and other receivables £104.5 £98.5m £66.7m £60.9m £60.3m £51.8m
Trade and other payables £87.4 £86.6m £64.8m £58.6m £56.1m £51.0m
Days Sales Outstanding (based on gross billings) 67.2 82.4 71.2 63.5 70.4 81.5
Days Payable Outstanding (based on cost of sales and recoverable 67.0 85.6 82.6 71.9 75.6 91.3
disbursements)
Trade receivables and payables increased at the year end as a consequence of a
growing business, however days sales outstanding and days payable outstanding
have both significantly decreased reflecting improved working capital
management and controls.
Administrative Costs Review
Average headcount increased from 1,432 in 2021 to 1,511 in 2022 driven
primarily by the growing freight forwarding operations in the Baltics.
Operating Costs (Key Items) 2022 2021 2020 2019 2018 2017
Staff Costs £40.0m £29.0m £24.6m £23.9m £18.6m £13.4m
Bad debts £0.9m £1.5m £0.9m £0.8m £1.1m £0.6m
Depreciation on right-of-use assets/rental payable under leases £12.4m £8.6m £6.3m £6.0m £5.9m £2.3m
Insurance £2.6m £1.7m £1.1m £0.9m £0.7m £0.4m
Plant and machinery hire £0.8m £0.5m £0.6m £0.7m £0.7m £0.3m
IT costs £1.4m £1.7m £2.1m £1.6m £0.6m £0.3m
Net Finance Costs
Excluding the IFRS 16 impact of £2.2m (2021: £1.6m), finance costs were
£0.7m compared to £0.4m in the prior year.
Impairment
The Group carries out its impairment tests from annually and all newly
acquired entities are also reviewed for impairment at the balance sheet date.
In 2021 the Group consolidated the activities of the acquired entities,
Benfleet Forwarding Ltd and Anglia Group Forwarding Ltd with the Freight
Forwarding activity of Delamode Plc into one entity, Delamode Anglia Ltd.
For the purposes of the Group impairment, this consolidated entity is
considered as one cash generating unit.
As a result of the underperformance of the UK Freight Forwarding business the
Board has provided an impairment on the intangible assets of £1.5m during the
year.
Richard Myson
Chief Financial Officer
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
2022 2021
Notes £'000 £'000
Gross billing 7 567,865 436,237
CONTINUING OPERATIONS
Revenue 3 386,697 296,594
Cost of sales (294,516) (228,201)
GROSS PROFIT 92,181 68,393
Other operating income 4 2,217 1,478
Impairment losses on receivables 17 (863) (1,475)
Administrative expenses 5 (84,213) (62,344)
Exceptional items included in administrative expenses above 27 (483) (2,610)
OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS 9,805 8,662
OPERATING PROFIT 5 9,322 6,052
Finance costs 8 (2,848) (1,937)
Finance income 8 47 172
PROFIT BEFORE INCOME TAX 6,521 4,287
Income tax 9 (3,701) (2,410)
PROFIT FOR THE YEAR 2,820 1,877
Profit attributable to:
Owners of the parent (178) 417
Non-controlling interests 2,998 1,460
2,820 1,877
Earnings per share attributable to the ordinary equity holders of the parent:
Basic earnings pence per share 10 (0.13) 0.29
The notes form part of these financial statements
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
2022 2021
£'000 £'000
PROFIT FOR THE YEAR 2,820 1,877
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 1,683 (1,289)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 4,503 588
Total comprehensive income attributable to:
Owners of the parent 1,329 (758)
Non-controlling interests 3,174 1,346
4,503 588
The notes form part of these financial statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
2022 2021
Notes £'000 £'000
ASSETS
NON-CURRENT ASSET
Intangible assets 12 20,011 21,923
Property, plant and equipment 13 4,398 4,563
Right-of-use assets 25 93,303 58,321
Investments 16 33 -
Trade and other receivables 17 1,247 -
Deferred tax asset 9 813 904
119,805 85,711
CURRENT ASSETS
Inventories 283 235
Trade and other receivables 17 104,597 98,495
Cash and cash equivalents 13,126 11,684
118,006 110,414
TOTAL ASSETS 237,811 196,125
2022 2021
Notes £'000 £'000
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 22 7,134 7,134
Share premium 23 13,149 13,149
Equity reserve 23 - 108
Translation reserve 23 913 (594)
Merger reserve 23 3,102 3,102
Retained earnings 23 3,092 4,121
Issued share capital and reserves attributable to the owners of the parent 27,390 27,020
Non-controlling interests 4,503 2,170
TOTAL EQUITY 31,893 29,190
LIABILITIES
NON-CURRENT LIABILITIES
Provisions 20 3,759 2,191
Lease liabilities - right-of-use assets 25 83,765 50,625
Interest bearing loans and borrowings 19 4,083 -
Trade and other payables 18 273 343
Deferred tax liability 9 1,702 2,011
93,582 55,170
CURRENT LIABILITIES
Trade and other payables 18 87,436 86,219
Lease liabilities - right-of-use assets 25 12,287 9,053
Interest bearing loans and borrowings 19 12,613 16,493
112,336 111,765
TOTAL LIABILITIES 205,918 166,935
TOTAL EQUITY AND LIABILITIES 237,811 196,125
The notes form part of these financial statements
The financial statements were approved and authorised for issue by the Board
of Directors and were signed by:
Richard Myson
CFO
22 May 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Share Share Equity Translation Merger Retained Total
capital premium reserve reserve reserve earnings Total NCI equity
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Carried forward 7,134 13,149 108 (594) 3,102 4,121 27,020 2,170 29,190
31 December 2021
Contributions by and distribution to owners
Dividends paid 11 - - - - - (851) (851) (841) (1,692)
Share options charge - - (108) - - - (108) - (108)
Total contribution by and distribution to owners
- - (108) - - (851) (959) (841) (1800)
Profit for the year - - - - - (178) (178) 2,998 2,820
Exchange differences on translation of foreign operations - - - 1,507 - - 1,507 176 1,683
Total comprehensive income for the year - - - 1,507 - (178) 1,329 3,174 4,503
Balance at 31 December 2022 7,134 13,149 - 913 3,102 3,092 27,390 4,503 31,893
Share Share Equity Translation Merger Retained Total
capital premium reserve reserve reserve earnings Total NCI equity
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Carried forward 7,132 13,139 1 581 3,102 5,901 29,856 1,332 31,188
31 December 2020
Contributions by and distribution to owners
Dividends paid 11 - - - - - (2,197) (2,197) (508) (2,705)
Share options granted - - 107 - - - 107 - 107
Share options exercised 2 10 - - - - 12 - 12
Total contribution by and distribution to owners
2 10 107 - - (2,197) (2,078) (508) (2,586)
Profit for the year - - - - - 417 417 1,460 1,877
Exchange differences on translation of foreign operations - - - (1,175) - - (1,175) (114) (1,289)
Total comprehensive income for the year - - - (1,175) - 417 (758) 1,346 588
Balance at 31 December 2021 7,134 13,149 108 (594) 3,102 4,121 27,020 2,170 29,190
The notes form part of these financial statements
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
2022 2021
Notes £'000 £'000
Continuing operations
Cash flows from operating activities
Cash generated from operations 1 21,124 6,721
Interest paid (605) (299)
Tax paid (2,829) (1,732)
Net cash from operating activities 17,690 4,690
Cash flows from investing activities
Purchase of property, plant and equipment 13 (1,157) (3,262)
Purchase of intangible fixed assets 12 (1,172) (309)
Purchase of investments 16 (33) -
Cash proceeds on disposal of property, plant and equipment 73 254
Interest received 8 47 172
Net cash outflow from investing activities (2,242) (3,145)
Cash flows from financing activities
New loans in year 19 5,500 10,869
Loan repayments in year 19 (6,176) (338)
Share issue (net of share issue costs) - 12
Dividends paid 11 (851) (2,197)
Repayments on leases (14,024) (9,347)
Non-controlling interest dividends paid (841) (508)
Net cash outflow from financing activities (16,392) (1,509)
(Decrease)/Increase in cash and cash equivalents (944) 36
Cash and cash equivalents at beginning of year 11,684 12,720
Effect of foreign exchange rate movements 1,507 (1,072)
Cash and cash equivalents at end of year 12,247 11,684
Cash and cash equivalents at end of year includes overdrafts of £879,000
(2021: £nil).
The notes form part of these financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1. RECONCILIATION OF PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM
OPERATIONS
2022 2021
£'000 £'000
Profit before income tax 6,521 4,287
Depreciation charges 13,790 9,691
Amortisation charges 1,742 1,676
Profit on disposal of property, plant and equipment (14) (47)
Impairment of intangibles 1,474 -
Loss/(profit) on disposal of right of use assets 10 (143)
Loss on disposal of intangible assets 3 -
Finance costs 2,848 1,937
Finance income (47) (172)
Share based payments (credit)/charge (108) 107
26,219 17,336
Increase in inventories (48) (176)
Increase in trade and other receivables (6,652) (31,520)
Increase in trade and other payables 37 21,043
Increase in provisions 1,568 38
Cash generated from operations 21,124 6,721
2. ACCOUNTING POLICIES
Description of the business
Xpediator Plc (the "Company") is a public limited company, incorporated in
England and Wales, United Kingdom. The registered office is 700 Avenue West,
Skyline 120 Great Notley, Braintree, Essex, CM77 7AA and the Company
registration number is 10397171.
The consolidated financial statements comprise the financial information of
the Company and its subsidiary undertakings (together the "Group"). Detail of
the entities of the Group are described in Note 14.
Basis of preparation
The financial statements have been prepared in accordance with UK adopted
international accounting standards, under the historical cost convention.
Accounting policies have been consistently applied to the periods presented.
The presentation currency used for the preparation of the financial statements
is Pounds Sterling (£), which is the currency of choice of the principal
investors of the Group. The amounts are rounded to the nearest thousand,
unless otherwise stated.
The preparation of financial statements in conformity with IFRSs requires the
use of certain accounting estimates. It also requires the directors to
exercise their judgement in the process of applying the Group's accounting
policies (see Note 2.1 - Critical accounting estimates and judgements).
Going concern
The Group meets its working capital requirements through the receipt of
revenues from the provision of its services in the UK and in CEE, the
management of capital and operating expenditure, from the working capital and
other borrowing facilities available to it and, from time to time, from the
issue of equity capital. Ultimately the receipt of revenues and charges due to
the Group depends on the availability of liquidity for the Group's customers
and the level of transport and logistics activity in the market.
The Director's expect to continue to grow the business throughout the current
year, and at the same time, remain aware of the potential challenges. The
business has good foundations and the changes that have occurred in the last
nine months, have further enhanced the business base. While cognisant of the
wider market environment and the ongoing volatility that is occurring in
different parts of the marketplace, transportation and storage of goods will
continue to be required and therefore the Director's believe the Group
continues to be well placed to grow.
At 31 December 2022 the Group had cash and cash equivalents of £13,126,000
(2021: £11,684,000). The Group also has funding facilities in place, details
of which are set out in note 19 of the financial statements.
Having regard to the above and based on their latest assessment of the budgets
and forecasts for the business of the company, the directors consider that
there are sufficient funds available to the Group to enable it to meet its
liabilities as they fall due for a period of not less than twelve months from
the date of approval of the financial statements. The directors therefore
consider it appropriate to adopt the going concern basis of accounting in
preparing the financial statements.
However, on 4 May 2023, the Board recommended an Offer from DLM Bidco Limited
(a newly incorporated entity indirectly owned by a consortium including the
Company's largest shareholder, Cogels Investments Limited, the investment
vehicle of close family members of Stephen Blyth (former CEO of Xpediator),
funds managed by Baltcap, one of the largest private equity investors in the
Baltic states, and Justas Versnickas, the Managing Director of, and 20%
shareholder in, Delamode Baltics UAB, a subsidiary of Xpediator Plc (together
the "Consortium")) to acquire the entire issued, and to be issued, share
capital of the Company, which may complete within the next 12 months. Details
of the Offer are available on our investor website (https://xpediator.com/
(https://xpediator.com/) offer-for-xpediator-plc/)
Whilst the completion of the Offer is subject to approval by eligible
shareholders at the shareholder meetings scheduled for 7 June 2023 and
sanction by the High Court of Justice in England and Wales, the Group
continues to operate autonomously with the assumption that trading will
continue post-acquisition as modelled in the detailed forecasts, without
adjustments to reflect any incremental costs or expected benefits should the
acquisition go ahead. As the directors do not have visibility over the future
intentions of the potential acquirer, there can be no certainty over the
nature of the continuing operations of the Group should the acquisition
proceed successfully. This gives rise to a material uncertainty, as defined in
auditing and accounting standards, related to events or conditions that may
cast significant doubt on the Group and the Company's ability to continue as a
going concern and in such circumstances, the Group and the Company may
therefore be unable to realise its assets and discharge its liabilities in the
normal course of business.
Basis of consolidation
The Group financial statements consolidate the financial statements of
Xpediator Plc and its subsidiaries drawn up to 31 December each year.
Subsidiaries are consolidated from the date of their acquisition, being the
date on which the Group obtains control, and continue to be consolidated until
the date that such control ceases. The Company has control over a subsidiary
if all three of the following elements are present: power over the investee,
exposure to variable returns from the investee, and the ability of the
investor to use its power to affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may be a
change in any of these elements of control.
The financial statements of subsidiaries are prepared for the same reporting
year as the Company, using consistent accounting policies. Intra-group
balances and transactions, including unrealised profits arising from
intra-Group transactions, have been eliminated. Unrealised losses are
eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Non-controlling interests represent the equity in
subsidiaries that is not attributable, directly or indirectly, to Xpediator
Plc.
Subsequent to the merger accounting noted below the consolidated financial
statements incorporate the results of business combinations using the
acquisition method. In the statement of financial position, the acquiree's
identifiable assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The results of
acquired operations are included in the consolidated income statement from the
date on which control is obtained. They are deconsolidated from the date on
which control ceases.
Merger accounting
On 25 May 2017, the Company entered into a share swap agreement with the
ultimate beneficiaries of Delamode Group Holdings Limited, whereby 4,000,000
new ordinary shares of £1.00 each were issued to the ultimate beneficiaries
of Delamode Group Holdings Limited in exchange for their shares in Delamode
Group Holdings Limited in the same proportion as their shareholding in
Delamode Group Holdings Limited. The merger method of accounting is used to
consolidate the results of Xpediator Plc.
On 8 June 2018, the Company issued 1,727,694 new ordinary shares of £0.05
each as part of the deferred consideration of Easy Managed Transport Limited
("EMT"). On 14 July 2018, the Company issued 3,740,648 new ordinary shares of
£0.05 each as part of the acquisition of Import Services Limited. On 31
December 2018, the Company issued 84,951 new ordinary shares of £0.05 each as
part of the deferred consideration of Regional Express Limited ("Regional").
On 16 May 2019, the Company issued 1,655,876 shares to the former owners of
EMT as part of the payment of the deferred consideration relating to the
acquisition of the entire equity of EMT in 2017. On 5 December 2019, the
Company issued 89,744 shares to the former owners of Regional as part of the
payment of the deferred consideration relating to the acquisition of the
entire equity of Regional in 2017. The premium on the fair value in excess of
the nominal value of shares issued in consideration of business combinations
is credited to the merger reserve.
Revenue
The Group generates revenue in the UK and Europe.
The Group operates a number of diverse businesses and accordingly applies a
variety of methods for revenue recognition, based on the principles set out in
IFRS 15. The revenue and profits recognised in any reporting period are based
on the satisfaction of performance obligations and an assessment of when
control is transferred to the customer. In determining the amount of revenue
and profits to record, and associated statement of financial position items
(such as trade receivables, contract assets and contract liabilities),
management is required to review performance obligations within individual
contracts. This may involve some judgemental areas (for example within the
logistics & warehousing business), where revenue is recorded in advance of
invoicing the customer.
Revenue is recognised either when the performance obligation in the contract
has been performed (so 'point in time' recognition) or 'over time' as control
of the performance obligation is transferred to the customer. For all
contracts, the Group determines if the arrangement with a customer creates
enforceable rights and obligations, which is in line with our contractual
commitments and industry standard best practice (for example Convention
Relative au Contrat de Transport International de Marchansies par la Route or
CMR).
For each performance obligation to be recognised over time, the Group applies
a revenue recognition method that faithfully depicts the Group's performance
in transferring control of the goods or services to the customer. This
decision requires assessment of the real nature of the goods or services that
the Group has promised to transfer to the customer. The Group has assessed the
period of time principles as follows:
· The customer receives the benefits of the good being
moved from the origin to the destination, as another supplier would not need
to re-perform the service performed to date (i.e. the goods have been moved
partway).
· The customer becomes committed to pay the Group the
moment that the goods are despatched and collected.
· The customer accepts that they are liable to pay for the
transaction in full although it is the Group's responsibility to ensure that
the shipment is in transit before invoicing.
· The customer can usually be invoiced on despatch/export
and has an obligation to pay for services despite any problems that may arise
in transit.
· The Group would hold any third party liable for any
issues that happen in transit that is beyond its reasonable control.
The Group recognises that it acts as both an agent and a principal. The Group
is a principal if it is responsible for the specified good or service before
that good or service is transferred to a customer. The Group is an agent if it
is not responsible for arranging for the provision of the specified good or
service by another party. In this case, the Group does not control the
specified good or service provided by another party before that good or
service is transferred to the customer. When the Group acts as an agent, it
recognises revenue in the amount of any fee or commission to which it expects
to be entitled in exchange for arranging for the specified goods or services
to be provided by the other party. The Affinity business (see Affinity section
of revenue recognition policy) primarily operates as an agent, and largely
recognises only the commission earned as revenue.
Freight Forwarding
Under IFRS 15, freight forwarding revenue is recognised over the period of
time based on the principles identified above. Therefore, revenue will consist
of freight delivered during the period as well as a proportion of revenue for
service delivered that are in process as at the end of the reporting period,
which is calculated on a time proportioned basis.
Logistics & Warehousing
Logistics & warehousing revenue is recognised over a period of time.
Invoicing varies by contract but is typically in line with work performed. Due
to the different contractual arrangements in place, each customer is assessed
to determine the amount of work carried out, which has not been invoiced at
the date of the Group's reporting period. This revenue is recognised by direct
reference to the amount of work carried out to deliver the service and
measured relative to cost or over the time period which the warehousing is
provided. Judgement is therefore required when determining the appropriate
timing and amount of revenue that can be recognised. The revenue from handling
of incoming products is recognised when a performance obligation is satisfied,
but not invoiced at the reporting date, which is correspondingly accrued on
the statement of financial position within contract assets.
Affinity
Revenue is recognised at a point in time only after the performance obligation
has been actually satisfied. Affinity and trucking services revenue largely
acts as an agent based on the assessment above, so only commission is recorded
as revenue. This largely relates to provision of DKV fuel cards, which enables
the customer to purchase fuel, tolls and other services.
In addition, the Affinity business operates as a reseller ferry crossing,
where revenue is recorded at a point in time as it is based on the performance
obligation being delivered. Revenue for this part of the business is recorded
as a principal due to the assessments identified above.
Gross billings (Affinity)
Recoverable disbursements incurred on behalf of our Affinity Division
customers based in Romania and the West Balkans include fuel costs, toll
charges and breakdown assistance. The gross billings figure is included within
the Groups trade payables and receivables but are excluded from consolidated
income statement revenue. The gross billing revenue number is a non-statutory
measure but is included to make a more meaningful calculation of days sales
outstanding and days payable outstanding, so it is important to understand the
level of billings going through the sales and purchase ledgers.
Franchise income
Income relating to franchise fees are not recorded as revenues by the Group
but are shown as other income. This revenue arises from the sales of services
to the franchisees. This income is recognised over a period of time based on
when the services have been transferred to the franchisee in accordance with
the terms and conditions of the relevant agreements.
Franchise fees comprise of revenue for the initial allocation of the franchise
to the respective member, IT support, marketing and the use of the
intellectual property.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the
purchase method. The cost of the business combination is measured as the
aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. The Group recognises any non-controlling
interest in the acquired entity on an acquisition-by-acquisition basis either
at fair value or at the non-controlling interest's proportionate share of the
acquired entity's net identifiable assets.
The acquiree's identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3: Business Combinations
are recognised at their fair values at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination
over the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised.
If the cost of the acquisition is less than the Group's interest in the net
fair value of the acquiree's identifiable assets, liabilities and contingent
liabilities, the difference is recognised directly in the Consolidated Income
Statement.
Non-controlling interests
The total comprehensive income of non-wholly owned subsidiaries is attributed
to owners of the parent and to the non-controlling interests in proportion to
their relative ownership interests.
Goodwill
Goodwill arising on the acquisition of a business represents any excess of the
fair value of the consideration over the fair value of the identifiable assets
and liabilities acquired. The identifiable assets and liabilities acquired are
incorporated into the consolidated financial statements at their fair value to
the Group.
Goodwill is not amortised but tested for impairment annually. Any impairment
is recognised immediately in the consolidated income statement and is not
subsequently reversed. On disposal of a business, the attributable amount of
goodwill is included in the determination of the profit or loss on disposal.
Impairment of non-financial assets (excluding inventories and deferred tax
assets)
Impairment tests on goodwill and intangibles with indefinite useful economic
lives are undertaken annually in November as part of the Group's budgeting
process, except in the year of acquisition when they are tested at the
year-end. Other non-financial assets are subject to impairment tests whenever
events or changes in circumstances indicate that their carrying amount may not
be recoverable. Where the carrying value of an asset exceeds its recoverable
amount (i.e. the higher of value in use and fair value less costs to sell),
the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the smallest Group of assets to
which it belongs for which there are separately identifiable cash flows; its
Cash Generating Units ("CGUs"). Goodwill is allocated on initial recognition
to each of the Group's CGUs that are expected to benefit from a business
combination that gives rise to the goodwill. Impairment charges are included
in profit or loss, except to the extent they reverse gains previously
recognised in other comprehensive income. An impairment loss recognised for
goodwill is not reversed.
Foreign currencies
The financial statements of the Group are presented in its reporting currency
of Sterling. The functional currency of each Group entity is the currency of
the primary economic environment in which the entity operates.
Transactions in foreign currencies during the period have been converted at
the rates of exchange ruling on the date of the transaction. Assets and
liabilities denominated in foreign currencies have been translated at the
rates of exchange ruling on the reporting date. Any gains or losses arising
from these conversions are credited or charged to administrative expenses in
the Consolidated Income Statement.
On consolidation, the results of overseas operations are translated into
Sterling at rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations, including goodwill
arising on the acquisition of those operations, are translated at the rate
ruling at the reporting date. Exchange differences arising on translating the
opening net assets at opening rate and the results of overseas operations at
actual rate are recognised in other comprehensive income and accumulated in
the translation reserve.
On disposal of a foreign operation, the cumulative exchange differences
recognised in the foreign exchange reserve relating to that operation up to
the date of disposal are transferred to the consolidated statement of
comprehensive income as part of the profit or loss on disposal.
Financial assets
The Group classifies its financial assets into the categories discussed below,
depending on the purpose for which the asset was acquired. The Group only has
financial assets classified as held at amortised cost. The financial assets
comprise of trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position.
Cash and cash equivalents includes cash in hand, deposits held with banks, and
- for the purpose of the statement of cash flows - bank overdrafts. Bank
overdrafts are shown within loans and borrowings in current liabilities on the
consolidated statement of financial position, unless there is a right of
set-off between bank accounts across the Group. In this instance, the net cash
position will be shown. Deposits held with banks comprise short-term deposits
with original maturities of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of
changes in value
These assets arise principally from the provision of goods and services to
customers (e.g. trade receivables), but also incorporate other types of
financial assets where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely
payments of principal and interest. Trade receivables are recognised initially
at the transaction price and other financial assets are initially recognised
at fair value plus transaction costs that are directly attributable to their
acquisition or issue. They are subsequently carried at amortised cost using
the effective interest rate method, less provision for impairment.
Impairment provisions for current and non-current trade receivables are
recognised based on the simplified approach within IFRS 9 using a historical
provision matrix in the determination of the lifetime expected credit losses.
During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, which are
reported net, such provisions are recorded in a separate provision account
with the loss being recognised within administration costs in the consolidated
statement of comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is written off
against the associated provision.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward looking expected credit loss
model. The methodology used to determine the amount of the provision is based
on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those for which credit risk has
increased significantly, lifetime expected credit losses are recognised,
unless further information becomes available contrary to the increased credit
risk. For those that are determined to be permanently credit impaired,
lifetime expected credit losses are recognised.
Capital management
The Group monitors its risk to a shortage of funds using a recurring liquidity
planning tool. This tool considers the maturity of both its financial
investments and financial assets (e.g. accounts receivables, other financial
assets) and projected cash flows from operations.
The Group's objective is to maintain a balance between continuity of funding
and flexibility through the use of bank overdrafts, invoice discounting and
long-term loan finance.
Financial liabilities
The Group classifies its financial liabilities into two categories - other
financial liabilities and fair value through profit and loss:
Other financial liabilities
The Group's other financial liabilities include bank loans, confidential
invoice discounting facility, trade and other payables and accruals. Bank
borrowings are initially recognised at fair value net of any transaction costs
directly attributable to the issue of the instrument. Such interest bearing
liabilities are subsequently measured at amortised cost using the effective
interest rate method, which ensures that any interest expense over the period
to repayment is at a constant rate on the balance of the liability carried in
the consolidated statement of financial position. For the purposes of each
financial liability, interest expense includes initial transaction costs and
any premium payable on redemption, as well as any interest or coupon payable
while the liability is outstanding.
Trade payables and other short-term monetary liabilities, which are initially
recognised at fair value and subsequently carried at amortised cost using the
effective interest method.
Fair value through profit and loss
This category only comprises of the element of deferred consideration on
business combinations, which is contingent on the performance of the acquired
businesses.
Share capital
Financial instruments issued by the Company are classified as equity only to
the extent that they do not meet the definition of a financial liability or
financial asset. The company's ordinary shares are classified as equity
instruments.
Leased assets
The Group assesses at inception whether the contract is, or contains, a lease.
A lease exists if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. The Group
assessment includes whether:
· the contract involves the use of an identified asset;
· the Group has the right to obtain substantially all of
the economic benefits from the use of the asset throughout the contract
period; and
· the Group has the right to direct the use of the asset.
At the commencement of a lease, the Group recognises a right-of-use asset
along with a corresponding lease liability.
The lease liability is initially measured at the present value of the
remaining lease payments, discounted using the individual entities incremental
borrowing rate. The lease term comprises the non-cancellable period of the
contract, together with periods covered by an option to extend the lease where
the Group is reasonably certain to exercise that option based on operational
needs and contractual terms. Subsequently, the lease liability is measured at
amortised cost by increasing the carrying amount to reflect interest on the
lease liability and reducing it by the lease payments made. The lease
liability is remeasured when the Group changes its assessment of whether it
will exercise an extension or termination option.
Right-of-use assets are initially measured at cost, comprising the initial
measurement of the lease liability adjusted for any lease payments made at or
before the commencement date, lease incentives received and initial direct
costs. Subsequently, right-of-use assets are measured at cost, less any
accumulated depreciation and any accumulated impairment losses, and are
adjusted for certain remeasurements of the lease liability.
Depreciation is calculated on a straight-line basis over the length of the
lease. The Group has elected to apply exemptions for short-term leases and
leases for which the underlying asset is of low value. For these leases,
payments are charged to the income statement on a straight-line basis over the
term of the relevant lease. Right-of-use assets are presented within
non-current assets on the face of the statement of financial position, and
lease liabilities are shown separately on the statement of financial position
in current liabilities and non-current liabilities depending on the maturity
of the lease payments.
Under IFRS 16, right-of-use assets will be tested for impairment in accordance
with IAS 36 Impairment of Assets. This has replaced the previous requirements
to recognise a provision for onerous lease contracts.
Payments associated with short-term leases are recognised on a straight-line
basis as an expense in the profit or loss. Short term leases are leases with a
lease term of 12 months or less.
Externally acquired intangible assets
Externally acquired intangible assets, other than Goodwill, are initially
recognised at cost and subsequently amortised on a straight‑line basis over
their useful economic lives.
Intangible assets are recognised on business combinations if they are
separable from the acquired entity or give rise to other contractual/legal
rights. The amounts ascribed to such intangibles are arrived at by using
appropriate valuation techniques (see section related to critical estimates
and judgements below).
The significant intangibles recognised by the Group, their useful economic
lives and the methods used to determine the cost of intangibles acquired in a
business combination are as follows:
Intangible asset Useful economic life Valuation method
Licences and trademarks 3-25 years Multiple of historic profits
Customer Related 6-10 Years Excess Earning Model
Technology Based 5 Years Replacement Cost
Taxation
The charge for current tax is based on the taxable income for the period. The
taxable result for the period differs from the result as reported in the
statement of comprehensive income because it excludes items which are not
assessable or disallowed and it further excludes items that are taxable and
deductible in other years. It is calculated using tax rates that have been
enacted or substantially enacted by the statement of financial position date.
Deferred income tax is provided using the liability method, for all temporary
differences arising between the tax bases of assets and liabilities and their
carrying values for financial reporting purposes.
Deferred tax assets are recognised only to the extent that future taxable
profit will be available such that realisation of the related tax benefits is
probable. The amount of the asset or liability is determined using tax rates
that have been enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities/ (assets) are
settled/(recovered).
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As
well as the purchase price, cost includes directly attributable costs and the
estimated present value of any future unavoidable costs of dismantling and
removing items. The corresponding liability is recognised within provisions.
Freehold land is not depreciated. Depreciation on assets under construction
does not commence until they are complete and available for use. Depreciation
is provided on all other items of property, plant and equipment so as to write
off their carrying value over their expected useful economic lives. It is
provided at the following rates:
Freehold buildings 2%-10% per annum straight line
Fixtures and fittings 20-33% per annum straight line/10%-25% on reducing balance
Computer equipment 33% per annum straight line/20%-50% on reducing balance
Motor vehicles 25-33% per annum straight line/20%-25% on reducing balance
Dividends
Dividends are recognised when they become legally payable. In the case of
final dividends, this is when approved by the shareholders at the annual
general meeting.
Holiday pay accrual
All employees accrue holiday pay during the calendar year, the board
encourages all employees to use their full entitlement throughout the year,
however in the unlikely case that an employee has untaken holiday pay this is
accrued for at the daily salary costs, including costs of employment, such as
social security.
Staff pensions
The Group does not operate a pension scheme for its employees however it does
make payments to defined contribution pension schemes on behalf of employees
in the UK in accordance with auto enrolment legislation. The payments made are
recognised as an expense in the period to which they relate.
Share-based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of equity instruments that will eventually vest. At
each reporting date, the Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in profit or loss over the remaining vesting
period, with a corresponding adjustment to the equity-settled employee
benefits reserve.
Equity-settled share-based payment transactions with other parties are
measured at the fair value of the goods or services received, except where the
fair value cannot be estimated reliably, in which case they are measured at
the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service.
Exceptional items
The Group has adopted an accounting policy and income statement format which
seeks to highlight unusual significant items of income and expense within
Group result for the year. The Directors consider that this presentation
provides a more representative analysis of the Group performance by
highlighting the impact of one-off items. Such items may include significant
restructuring costs, profits or losses on disposal or termination of
operations, gains or losses on disposal of investments, significant impairment
of assets, and significant costs incurred in the relocation of operations.
Further details can be found in note 27 to the Consolidated financial
statements.
Provisions
The Group has recognised provisions for liabilities of the uncertain timing or
amount for leasehold dilapidations. The provision is measured at the best
estimate of the expenditure required to settle the obligation at the reporting
date, discounted at a pre-tax rate reflecting current market assessments of
the time value of money and risks specific to the liability. The provision
takes into account the potential that the properties in question may be sublet
for some or all of the remaining lease term.
The directors are aware of potential risks relating to the impact of climate
change, and consider no provision is required at the year end (2021: £nil).
2.1 Critical Accounting Estimates and Judgements
The Group makes certain estimates and assumptions regarding the future.
Management also needs to exercise judgement in applying the Group's accounting
policies. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. In the
future, actual experience may differ from these estimates and assumptions.
2.1.1 Principal estimates
· Estimated impairment of intangible assets (including
goodwill)
The Group annually tests whether the carrying value of intangible assets
(including goodwill) has suffered any impairment. These calculations require
the use of estimates, both in arriving at the expected future profitability of
the cash generating units (CGUs) and the application of a suitable discount
rate in order to calculate the present value of these flows. As the impairment
of the CGUs is based on a future forecast, the Group has used a level of
judgement around key assumptions of future cashflows greater than 12 months.
At 31 December 2022, the carrying value of intangible assets (including
goodwill) is £20,011,000 (2021: £21,923,000). Details of the impairment and
sensitivity of cashflows are disclosed in note 12.
· Trade receivables
In accordance with IFRS 9, the Group assesses whether the credit risk has
increased significantly since initial recognition, the Group compares the risk
of a default occurring on the financial instrument both due within one year
and more than one year as at the reporting date with the risk of a default
occurring on the trade receivable as at the date of initial recognition. In
making this assessment, the Group considers both quantitative and qualitative
information that is reasonable and supportable, including historical
experience and forward-looking information that is available without undue
cost or effort. The Group has trade receivables less provision for expected
credit losses at the year-end of £86,022,000 (2021: £77,699,000). Details of
trade receivables and expected credit loss are disclosed in note 17.
· Deferred tax assets
Deferred tax assets have been recognised in relation to trading losses
generated in the entities, these have been restricted to those instances where
it is probable that the assets will be utilised against future trading
profits. The Group has recognised a deferred tax asset of £813,000 (2021:
£904,000) as disclosed in note 8.
2.1.2 Principal judgements
· Current financial assets
Current financial assets relate to the security deposits held by DKV on behalf
of the Group which are refundable on termination of the agreement which can be
served giving three months' notice hence they are classed as current assets,
are disclosed in note 17.
3. REVENUE ANALYSIS BY COUNTRY
2022 2021
£'000 £'000
United Kingdom 110,643 114,943
Lithuania 156,301 91,261
Romania 55,525 40,582
Bulgaria 41,707 33,369
Serbia 9,997 8,307
Other 12,524 8,132
Total revenue 386,697 296,594
The table below shows revenue by timing of transfer of goods and services:
3A) REVENUE FROM CONTRACTS WITH CUSTOMERS
2022 2021
£'000 £'000
Over a period of time 378,254 290,318
At a point in time 8,443 6,276
Total revenue 386,697 296,594
Revenue is derived from three main divisions: Transport solutions, referred to
as Affinity, Freight Forwarding, and Logistics & Warehousing, as detailed
in note 7.
3B) CONTRACT ASSETS
2022 2021
£'000 £'000
At 1 January 6,256 1,335
Net movement for the year (2,982) 4,921
At 31 December 3,274 6,256
Contract assets are included within trade and other receivables on the face of
the statement of financial position.
3C) NON-CURRENT ASSETS BY COUNTRY
2022 2021
£'000 £'000
United Kingdom 93,848 70,493
Romania 6,293 7,806
Bulgaria 5,273 699
Lithuania 13,848 6,547
Serbia 468 102
Other 75 64
Total Non-Current Assets 119,805 85,711
4. OTHER OPERATING INCOME
Other operating income arises mainly from sundry services executed by the
Group, not being freight forwarding, logistics and warehousing or affinity
services. Since this is not considered to be part of the main revenue
generating activities, the Group presents this income separately from revenue.
2022 2021
£'000 £'000
Recharges to Franchise members 1,336 1,098
Recovery of fines/penalties 387 (90)
Rental income 392 20
Other 102 450
2,217 1,478
5. OPERATING PROFIT
2022 2021
£'000 £'000
Operating profit is stated after charging/(crediting):
Short term hire costs 814 526
Depreciation - owned assets (note 13) 1,341 1,108
Depreciation - right of use assets (note 25) 12,449 8,583
Amortisation of intangible assets (note 12)(1) 1,742 1,676
Impairment of goodwill arising on acquisition of subsidiary (note 12) 1,474 -
Auditors' remuneration 330 320
Gain on disposal of property, plant and equipment (14) (47)
Loss on disposal of intangible assets 3 -
Loss/(gain) on disposal of right of use assets 10 (143)
Foreign exchange losses/(gains) 832 (344)
(1)Amortisation charges on the Group's intangible assets are recognised in the
administrative expenses line item in the consolidated income statement.
The remuneration paid to Crowe U.K. LLP and its associates; the Group's
external auditors is as follows:
2022 2021
£'000 £'000
Audit and Audit Related Services
The audit of the Company and Group financial statements 131 114
The audit of the financial statements of subsidiaries of the Group 189 196
Other assurance services 10 10
Total audit and audit related services 330 320
6. EMPLOYEE BENEFIT EXPENSES
2022 2021
£'000 £'000
Employee benefit expenses (including directors) comprise:
Wages and salaries 37,298 26,440
Short-term non-monetary benefits 113 447
Share based payments (credit)/charge (108) 88
Defined contribution pension cost 532 367
Social security contributions and similar taxes 2,183 1,695
Total 40,018 29,037
Key management personnel compensation
Key management personnel are those persons having authority and responsibility
for planning, directing and controlling the activities of the Group, including
the directors of the Company.
2022 2021
£'000 £'000
Salary and bonuses 1,259 1,985
Compensation for loss of office 202 202
Short-term non-monetary benefits 26 27
Share based payments (credit)/charge (19) 19
Defined contribution pension cost 13 44
Total 1,481 2,277
Directors' remuneration
2022 2021
£'000 £'000
Salary and bonuses 943 907
Compensation for loss of office 80 202
Short-term non-monetary benefits 10 24
Share based payments (credit)/charge (10) 10
Defined contribution pension cost 4 11
Total 1,027 1,154
Short-term non-monetary benefits comprises of private family medical cover,
company car and insurance benefits.
Total remuneration regarding the highest paid Director is as follows:
2022 2021
£'000 £'000
Total aggregate remuneration 232 617
The average number of employees (including directors) during the year was as
follows:
2022 2021
Freight forwarding 859 754
Logistics 585 550
Other 67 128
Total 1,511 1,432
7. SEGMENTAL ANALYSIS
Types of services from which each reportable segment derives its revenues
The Group had three main divisions: Transport Solutions, referred to as
Affinity, Freight Forwarding, and Logistics & Warehousing. All revenue is
derived from the provision of services.
· Freight Forwarding - This division is the core business
and relates to the movement of freight goods across Europe. This division
accounts for the largest proportion of the Group's business, generating 81% of
its external revenues. (2021: 79%)
· Affinity - This division is the Transport Solution's arm
of the Group. It focuses on the reselling of DKV fuel cards, leasing, ferry
crossings and other associated transport related services. This division
accounts for 2% of the Group's business in terms of revenue (2021: 2%)
· Logistics & Warehousing - This division is involved
in the warehousing and domestic distribution; delivering 17% of the Group's
external revenues in 2022 (2021: 19%).
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technology and marketing strategies.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision maker has been identified as the management team comprising the
Divisional Chief Operating Officers, the Chief Executive Officer and the Chief
Financial Officer.
Measurement of operating segment profit or loss
The Group evaluates segmental performance on the basis of profit or loss from
operations calculated in accordance with IFRS 8. Segment assets and
liabilities are measured in the same way in the financial statements, and they
are allocated based on the operations of the segment.
Inter-segment sales are priced at market rates and at arm's length basis,
along the same lines as sales to external customers. This policy was applied
consistently throughout the current and prior period.
Freight Logistics &
Forwarding Warehousing Affinity Overheads Total
2022 2022 2022 2022 2022
£'000 £'000 £'000 £'000 £'000
Gross billings 312,596 65,627 189,611 31 567,865
Less recoverable disbursements - - (181,168) - (181,168)
Total revenue 312,596 65,627 8,443 31 386,697
Inter-segmental revenue 74 (74) - - -
Total revenue from external customers 312,670 65,553 8,443 31 386,697
Depreciation & amortisation
(excluding right-of-use asset depreciation) (1,209) (1,493) (64) (317) (3,083)
Segment profit before central overhead allocation
(excluding exceptional items) 12,572 662 2,709 (6,138) 9,805
Allocation of central overheads (1,347) (707) (17) 2,071 -
Segment profit after central overhead allocation
(excluding exceptional items) 11,225 (45) 2,692 (4,067) 9,805
Net finance costs (2,801)
Exceptional items (483)
Profit before income tax 6,521
Total segment assets / equity & liabilities 102,438 84,706 28,966 21,701 237,811
Freight Logistics &
Forwarding Warehousing Affinity Overheads Total
2021 2021 2021 2021 2021
£'000 £'000 £'000 £'000 £'000
Gross billings 234,182 56,136 145,919 - 436,237
Less recoverable disbursements - - (139,643) - (139,643)
Total revenue 234,182 56,136 6,276 - 296,594
Inter-segmental revenue (607) 607 - - -
Total revenue from external customers 233,575 56,743 6,276 - 296,594
Depreciation & amortisation
(excluding right-of-use asset depreciation) (973) (1,482) (49) (280) (2,784)
Segment profit before central overhead allocation
(excluding exceptional items) 9,673 1,498 2,355 (4,864) 8,662
Allocation of central overheads (1,615) (802) (79) 2,496 -
Segment profit after central overhead allocation
(excluding exceptional items) 8,058 696 2,276 (2,368) 8,662
Net finance costs (1,765)
Exceptional items (2,610)
Profit before income tax 4,287
Total segment assets / equity & liabilities 88,065 71,281 25,917 10,862 196,125
8. NET FINANCE COSTS
2022 2021
£'000 £'000
Finance income:
Deposit account interest 47 143
Interest receivable on Benfleet vendor income - 29
Total finance income 47 172
Finance costs:
Bank loan & confidential invoicing discount interest (687) (352)
Right-of-use asset interest (2,161) (1,585)
Total finance costs (2,848) (1,937)
Net finance costs (2,801) (1,765)
9. INCOME TAX
Analysis of tax expense
2022 2021
£'000 £'000
Current tax:
Tax on profits for the year 4,004 2,338
Adjustments in respect of prior periods (65) (60)
Total current tax payable 3,939 2,278
Deferred tax credit (238) 132
Total tax expense in consolidated statement of profit or loss 3,701 2,410
The reconciling items for the difference between the actual tax charge for the
year and the standard rate of corporation tax in UK (the ultimate parent
company's tax residency) applied to profits for the year are as follows:
2022 2021
£'000 £'000
Profit before tax 6,521 4,287
UK tax charge at 19% 1,239 814
Overseas tax charge (976) (616)
Expenses not deductible for tax purposes 1,252 728
Movement in deferred tax (238) (134)
Remeasurement of deferred tax - change in the UK tax rate - 266
Unrecognised deferred tax 2,515 1,826
Adjustment in respect of prior periods (65) (60)
Other (26) (414)
Total tax expense 3,701 2,410
Deferred Tax
2022 2021
Assets - Arising from Trading losses £'000 £'000
Balance as at 1 January 904 707
Movement in the year as a result of trading (91) (20)
Effect of change in rate of taxation - 217
Balance as at 31 December 813 904
2022 2021
Liabilities £'000 £'000
Balance as at 1 January (2,011) (1,697)
(Charge)/release to income statements 328 154
Effect of change in rate of taxation - (483)
Movement in foreign exchange (19) 15
Balance as at 31 December (1,702) (2,011)
The deferred tax asset relates to losses carried forward at the rate of tax in
the relevant jurisdiction.
The UK government announced that the corporation tax rate of 25% will be
enacted for the tax year 1 April 2023 to 31 March 2024 and this is the rate
reflected in these financial statements. Deferred taxes at the statement of
financial position date have been measured using these enacted tax rates and
reflected in these financial statements.
In addition, the Group has potential deferred tax assets for trading losses
totalling £8,481,000 (2021: £3,170,000) arising from certain subsidiaries
across the Group. These assets have not been recognised due to insufficient
certainty that the suitable profits will be generated in the foreseeable
future.
The deferred tax liabilities relate to liabilities arising as part of the
Group's acquisitions.
10. EARNINGS PER SHARE
2022 2021
'000 '000
Basic weighted average number of shares 141,688 141,660
Potentially dilutive share options - 267
Diluted weighted average number of shares 141,688 141,927
£'000 £'000
(Loss)/profit for the year attributable to owners of the parent company (178) 417
Earnings pence per share - basic (0.13) 0.29
Earnings pence per share - diluted N/a 0.29
£'000 £'000
(Loss)/profit for the year attributable to owners of the parent company (178) 417
Exceptional items (note 27) 483 2,610
Amortisation of intangible assets arising from acquisitions (note 12) 1,471 1,472
Impairment of goodwill arising on acquisition of subsidiary (note 12) 1,474 -
Additional interest charge due to IFRS16 accounting standard change 1,046 714
Adjusted profit for the year attributable to owners of the parent company 4,296 5,213
Adjusted earnings pence per share - basic 3.03 3.68
Adjusted earnings pence per share - diluted 3.03 3.67
11. DIVIDENDS
2022 2021
£'000 £'000
Final dividend of £nil (2021: 0.60p) per ordinary share - 850
Interim dividend of £nil (2021: 0.50p) per ordinary share - 709
Subject to approval by shareholders, the Board is not recommending a final
dividend to be paid to shareholders, whilst no interim dividend was paid
during the year. In 2021 a total dividend of 1.10p per share was paid.
However, pursuant to the Offer and conditional upon shareholder approval and
the Offer completing, a special dividend of 2p per share will be paid by the
Company, further details as to the timing of which will be provided as
appropriate, in due course.
12. INTANGIBLE ASSETS
Group
Licences and trademarks Goodwill Customer Technology Total
Related Related
COST £'000 £'000 £'000 £'000 £'000
At 1 January 2022 3,387 14,160 12,258 510 30,315
Additions 1,172 - - - 1,172
Transfer (253) 253 - - -
Disposals (4) - - - (4)
Exchange differences 182 - - - 182
At 31 December 2022 4,484 14,413 12,258 510 31,665
AMORTISATION
At 1 January 2022 952 1,845 5,241 354 8,392
Charge for the year 364 - 1,276 102 1,742
Impairment - 1,474 - - 1,474
Disposals (1) - - - (1)
Exchange differences 47 - - - 47
At 31 December 2022 1,362 3,319 6,517 456 11,654
NET BOOK VALUE
At 31 December 2022 3,122 11,094 5,741 54 20,011
At 1 January 2022 2,435 12,315 7,017 156 21,923
Customer Technology
Licences Goodwill Related Related Total
COST £'000 £'000 £'000 £'000 £'000
At 1 January 2021 3,234 14,160 12,258 510 30,162
Additions 309 - - - 309
Disposals (90) - - - (90)
Exchange differences (66) - - - (66)
At 31 December 2021 3,387 14,160 12,258 510 30,315
AMORTISATION
At 1 January 2021 751 1,845 3,871 252 6,719
Charge for the year 204 - 1,370 102 1,676
Disposals (90) - - - (90)
Exchange differences 87 - - - 87
At 31 December 2021 952 1,845 5,241 354 8,392
NET BOOK VALUE
At 31 December 2021 2,435 12,315 7,017 156 21,923
At 1 January 2021 2,483 12,315 8,387 258 23,443
The goodwill included in the above note, relates to acquisition of Pallet
Express Srl in January 2016, Easy Managed Transport Limited in March 2017,
Benfleet Forwarding Limited in October 2017, Regional Express Limited in
November 2017, Anglia Forwarding Group Limited in June 2018, Import Services
Limited in July 2018, International Cargo Centre Limited in April 2020 and
Nidd Transport Limited in October 2020.
Goodwill arising on acquisition of a UK freight forwarding subsidiary was
written down during the year by £1,474,000 (2021: £nil), reflecting expected
profitability.
Annual test for impairment
The Group carries out its impairment tests annually in November as part of the
budget process and all newly acquired entities are also reviewed for
impairment at the reporting date.
Upon acquisition the goodwill and other intangibles are calculated at Cash
Generating Unit ("CGU") level, these are then measured based on forecast cash
flow projections, the first year of which is based on the CGU's current annual
financial budget which has been approved by the board. The cash flow
projections for years two to five have been derived based on growth rates that
are considered to be in line with the market expectations.
The recoverable amount is determined based on value in use calculations. The
use of this method requires the estimation of future cash flows and the
determination of a discount rate in order to calculate the present value of
the cash flows.
In determining the future free cash flow, the main drivers have been revenue
and Earnings Before Interest and Tax ("EBIT") margins, with margins remaining
at expected levels.
The directors have reviewed the future profit and cash flow forecasts for the
next five years and applying a discount rate of between 13.8% to 17.3% to the
cash flow projections when determining the net present value of these cash
flow. Goodwill arising on acquisition of a UK freight forwarding subsidiary
was written down during the year by £1,474,000 (2021: £nil), reflecting
expected profitability. The Directors believe there is sufficient headroom in
the value of the remaining CGUs to not have to further impair the goodwill.
Key assumptions used in the impairment calculations are as follows:
Short term Long Term
Impairment Revenue Revenue
Entity Division WACC % Growth Rate % Growth Rates %
Pallet Express Srl Logistics & Warehousing 15.4 13.1 3.0
Delamode Logistics Limited Logistics & Warehousing 14.6 (2.7) 3.5
Delamode Anglia Limited Freight Forwarding 17.3 1.0 1.3
Regional Express Limited Logistics & Warehousing 15.4 5.4 3.0
Nidd Transport Limited Freight Forwarding 13.8 7.2 3.3
The WACC of the Group has been calculated at a rate of between 13.8% to 17.3%
with each CGU being adjusted to take into consideration a specific Company
premium risk factor.
The short-term growth rate for each CGU uses several factors including the
expected new business or the loss of existing business. These growth rates are
based on the internal three-year plans submitted by local management and
reviewed through a thorough board process during the annual budget cycle.
Sensitivity to changes in key assumptions
Impairment testing is dependent on management's estimates and judgements,
particularly as they relate to the forecasting of future cashflows, the
discount rates selected and expected long-term growth rates.
The Group has conducted sensitivity analysis on the impairment test of the
CGU's classified within continuing operations. Goodwill arising on acquisition
of a UK freight forwarding subsidiary was written down during the year by
£1,474,000 (2021: £nil), reflecting expected profitability and considering
sensitivity in key assumptions, as detailed below (inclusive of the write
down):
Assumption Estimate Change Excess / (Shortfall)
used £'000 £'000
Increase in long term growth 1.3% + 1.0% 2,599
Decrease in long term growth 1.3% - 1.0% 1,515
Increase in WACC 17.3% + 1.0% 1,587
Decrease in margins Forecast - 0.25% 1,225
Delay in turnaround - EBIT as % of revenue in 2023/2024 1.8% - 3.4% (684)
The directors believe that there is sufficient headroom in the value of the
remaining business to not have to further impair the goodwill.
13. PROPERTY, PLANT AND EQUIPMENT
Freehold Fixtures Motor Computer
property and fittings vehicles equipment Totals
Group £'000 £'000 £'000 £'000 £'000
COST
At 1 January 2022 322 4,248 921 3,824 9,315
Additions 131 548 79 399 1,157
Disposals - (183) (132) (141) (456)
Transfers between categories - 230 (99) (131) -
Exchange differences 43 35 (65) 5 18
At 31 December 2022 496 4,878 704 3,956 10,034
DEPRECIATION
At 1 January 2022 121 1,881 529 2,221 4,752
Charge for the year 41 628 87 585 1,341
Eliminated on disposal - (174) (119) (104) (397)
Transfers between categories - 136 (1) (135) -
Exchange differences 1 27 (41) (47) (60)
At 31 December 2022 163 2,498 455 2,520 5,636
NET BOOK VALUE
At 31 December 2022 333 2,380 249 1,436 4,398
At 1 January 2022 201 2,367 392 1,603 4,563
Freehold Fixtures Motor Computer
property and fittings vehicles equipment Totals
Group £'000 £'000 £'000 £'000 £'000
COST
At 1 January 2021 258 2,666 1,024 2,745 6,693
Additions 106 1,717 145 1,294 3,262
Disposals (31) (74) (209) (160) (474)
Exchange differences (11) (61) (39) (55) (166)
At 31 December 2021 322 4,248 921 3,824 9,315
DEPRECIATION
At 1 January 2021 97 1,462 671 1,767 3,997
Charge for the year 35 513 61 499 1,108
Eliminated on disposal (8) (70) (176) (12) (266)
Exchange differences (3) (24) (27) (33) (87)
At 31 December 2021 121 1,881 529 2,221 4,752
NET BOOK VALUE
At 31 December 2021 201 2,367 392 1,603 4,563
At 1 January 2021 161 1,204 353 978 2,696
14. SUBSIDIARIES
The subsidiaries of Xpediator Plc, all of which have been included in these
consolidated financial statements, are as follows:
Proportion of Proportion of
ownership ownership
Registered Country of interest interest
Name Office incorporation 2022 2021
Delamode Holdings Ltd 1 United Kingdom 100% 100%
Delamode Distribution UK Ltd 1 United Kingdom 51% 51%
Delamode Plc 1 United Kingdom 100% 100%
Delamode Property Ltd 1 United Kingdom 100% 100%
Xpediator Services Limited 1 United Kingdom 100% 100%
Easy Managed Transport Limited 1 United Kingdom 100% 100%
Benfleet Forwarding Limited 1 United Kingdom 100% 100%
Regional Express Limited 1 United Kingdom 100% 100%
Delamode International Logistics Ltd (formerly Import Services Ltd) 1 United Kingdom 100% 100%
Anglia Forwarding Group Limited 1 United Kingdom 100% 100%
Delamode Anglia Ltd (formerly Anglia Forwarding Ltd) 1 United Kingdom 100% 100%
Traker International Limited 1 United Kingdom 100% 100%
Delamode Nidd Ltd (formerly Nidd Transport Ltd) 1 United Kingdom 100% 100%
International Cargo Centre Limited 1 United Kingdom 100% 100%
Affinity Transport Solutions Srl 2 Romania 100% 100%
Delamode Moldova Srl 3 Moldova 100% 100%
Delamode Bulgaria OOD 4 Bulgaria 90% 90%
Delamode Balkans DOO 5 Serbia 100% 100%
Affinity Balkans DOO 6 Montenegro 100% 100%
Delamode Macedonia 7 Macedonia 100% 100%
Delamode Baltics UAB 8 Lithuania 80% 80%
Delamode Estonia OÜ 9 Estonia 80% 80%
Delamode Romania Srl 2 Romania 100% 100%
Affinity Leasing IFN 2 Romania 99.95% 99.95%
Delamode Group Limited 10 Malta 100% 100%
Delamode Group Holdings Limited 10 Malta 100% 100%
Pallet Express Srl 11 Romania 100% 100%
Pallex Hungary 12 Hungary 100% 100%
Regional Express Gmbh 13 Germany 100% 100%
Delamode Netherlands BV 14 Netherlands 100% -
Delamode Finland OY 15 Finland 100% -
Delamode Group Holdings Limited, Easy Managed Transport Limited, Benfleet
Forwarding Limited, Regional Express Limited, Delamode International Logistic
Limited, Anglia Forwarding Group Limited, Delamode Nidd Limited and Delamode
Netherlands BV, are the only Subsidiaries held directly by Xpediator Plc.
1 700 Avenue West, Skyline 120, Braintree, Essex,
CM77 7AA, United Kingdom
2 Bulevardul Timişoara, Nr. 4A, Etaj 1, Bucureşti
Sectorul 6, 061328, Romania
3 Bd. Moscova 21/5 of. 1011 MD-2068, Chisinau,
Republic of Moldova
4 361 Tsarigradsko Shose Boulevard, 1582, Sofia,
Bulgaria
5 Bulevar Oslobodenja 113, 11010 Vozdovac, Belgrade,
Serbia
6 Dzordza, Vasingtona 51/43, Podgorica, 81000,
Montenegro
7 Stefan Jakimov Dedov 14/1 1, 1000 Skopje,
Macedonia
8 Eiguliu G, 2 03150, Vilnius, Lithuania
9 Pärnu mnt 160e, 11318 Tallinn, Estonia
10 Europa Business Centre, Level 3 - Suite 701, Dun Karn
Street Birkirkara BKR 9034, Malta
11 Stefan cel Mare street, no. 197A, Sibiu, 550321,
Romania
12 1141 Budapest Szuglo utcs 82, Hungary
13 Darmstadter Landstrasse 116, Frankfurt, 60598,
Germany
14 Venneveld 9, 4705RR Roosendaal, the Netherlands
15 Malminkaari 23 A 00700 Helsinki, Finland
The following companies are entitled to exemption from audit under Section
479A of the UK Companies Act 2006 relating to subsidiary companies:
Company Registration
Delamode Property Limited 06895332
Traker International Limited 02068943
International Cargo Centre Limited 02932640
Xpediator Services Limited 09724594
Anglia Forwarding Group Limited 07148692
Benfleet Forwarding Limited 02218468
Easy Managed Transport Limited 02293696
Delamode Holdings Limited 05751316
Delamode Plc 03716214
15. NON-CONTROLLING INTERESTS
Non-controlling interests ("NCI") held in the Group are as follows:
2022 2021
Delamode Baltics UAB 20.0% 20.0%
Delamode Estonia OÜ 20.0% 20.0%
Delamode Bulgaria OOD 10.0% 10.0%
Affinity Leasing IFN 0.05% 0.05%
Delamode Distribution UK Limited 49.0% 49.0%
The summarised financial information in relation to Delamode Bulgaria OOD and
Delamode Baltics UAB before intra-Group eliminations, is presented below
together with amounts attributable to NCI:
Delamode Delamode
Bulgaria OOD Baltics UAB
£'000 £'000
Total NCI at 1 January 2022 201 1,715
Non-controlling interest in results for the year 142 2,814
Non-controlling interest in dividends for the year (90) (629)
Non-controlling Interest in translation adjustment 11 94
Total NCI at 31 December 2022 264 3,994
Delamode Delamode
Bulgaria OOD Baltics UAB
£'000 £'000
Share Capital - 5
Reserves 264 3,989
Total NCI at 31 December 2022 264 3,994
Income Statement Delamode Bulgaria OOD Delamode Baltics UAB
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Revenue 42,503 34,428 158,726 93,066
Cost of sales (37,825) (30,598) (128,231) (78,135)
Gross profit 4,678 3,830 30,495 14,931
Administrative expenses (3,335) (2,522) (15,394) (8,298)
Other income 227 21 451 164
Operating profit 1,570 1,329 15,552 6,797
Finance income/(costs) (52) (15) 350 217
Profit before tax 1,518 1,314 15,902 7,014
Tax expense (153) (132) (2,366) (1,051)
Profit after tax 1,365 1,182 13,536 5,963
Profit after tax attributable to non-controlling interests 137 118 2,707 1,193
Statement of Financial Position Delamode Bulgaria OOD Delamode Baltics UAB
2022 2021 2022 2021
For the year to 31 December £'000 £'000 £'000 £'000
Assets:
Non-current trade and receivables 31 17 1,548 465
Property plant and equipment 65 80 383 240
Right-of-use assets 5,187 622 12,079 6,240
Inventories 33 13 56 175
Trade and other debtors 6,962 7,462 35,497 22,011
Cash and cash equivalents 1,614 914 6,708 1,495
13,892 9,108 56,271 30,626
Liabilities:
Trade and other payables 6,080 6,477 23,821 15,813
Lease liabilities - right-of-use assets 5,167 622 11,801 6,240
Loans and other borrowings - - 680 -
11,247 7,099 36,302 22,053
Total net assets 2,645 2,009 19,969 8,573
Accumulated non-controlling interests 264 201 3,994 1,715
Statement of Cash Flows Delamode Bulgaria OOD Delamode Baltics UAB
2022 2021 2022 2021
For the year to 31 December £'000 £'000 £'000 £'000
Cash flows from operating activities 1,859 848 8,684 352
Cash flows from investing activities (34) (21) (3,168) 525
Cash flows from financing activities (1,246) (973) (754) (1409)
Increase/(Decrease) in cash and cash equivalents 579 (146) 4,762 (532)
Cash and cash equivalents at beginning of year 914 1,156 1,495 2,336
Effect of foreign exchange rate movements 121 (96) 451 (309)
Cash and cash equivalents at end of year 1,614 914 6,708 1,495
The NCI of all the other shareholders, that are not 100% owned by the Group
are considered to be immaterial.
16. INVESTMENTS
Cost Participating interests
£'000
At 1 January 2022 -
Movement 33
At 31 December 2022 33
Net Book Value
At 31 December 2022 33
17. TRADE AND OTHER RECEIVABLES
2022 2021
Group £'000 £'000
Current:
Trade receivables 90,867 82,127
Less: provision for impairment of trade receivables (4,845) (4,428)
86,022 77,699
Current financial assets 4,915 5,082
Prepayments and contract assets 10,584 10,845
Other receivables 3,076 4,869
Total 104,597 98,495
Non-Current
Trade and other receivables 1,247 -
Current financial assets relate to the security deposits held by DKV on behalf
of the Group which are refundable on termination of the agreement which can be
served giving three months' notice hence they are classed as current assets.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables
and contract assets. To measure expected credit losses on a collective basis,
trade receivables and contract assets are grouped based on similar credit risk
and aging. The contract assets have similar risk characteristics to the trade
receivables for similar types of contracts.
The expected loss rates are based on the Group's historical credit losses
experienced. The historical loss rates are then adjusted to reflect current
and forward-looking information, any known legal and specific economic
factors, including the credit worthiness and ability of the customer to settle
the receivable.
The movements in the impairment allowance for trade receivables are as
follows:
2022 2021
Group £'000 £'000
At 1 January 4,428 2,976
Amount charged to the Consolidated Income Statement in the year 863 1,475
Receivables written off during the year as uncollectible (446) (23)
At 31 December 4,845 4,428
The lifetime expected loss provision for trade receivables and contract assets
is as follows:
Current More than 30 Days Past Due More than 60 Days Past Due More than 90 Days Past Due Total
At 31 December 2022 £'000 £'000 £'000 £'000 £'000
Expected loss rate 0.27% 4.24% 6.14% 66.73%
Gross carrying amount 80,120 5,471 1,978 6,412 93,981
Loss provision 213 232 121 4,279 4,845
Current More than 30 Days Past Due More than 60 Days Past Due More than 90 Days Past Due Total
At 31 December 2021 £'000 £'000 £'000 £'000 £'000
Expected loss rate 1.2% 12.9% 6.0% 74.9%
Gross carrying amount 80,901 2,197 1,128 4,157 88,383
Loss provision 963 283 68 3,114 4,428
18. TRADE AND OTHER PAYABLES
2022 2021
Group £'000 £'000
Current:
Trade and other payables 76,475 72,094
Social security and other taxes 3,838 2,032
Other creditors 2,988 6,760
Accruals 4,135 5,333
Total Trade and other payables 87,436 86,219
Non-current
Trade and other payables 273 343
19. BANK AND OTHER LOANS
2022 2021
Group £'000 £'000
Current:
Overdrafts 879 -
Bank loans 912 1,891
Confidential invoice discounting facility 10,822 14,602
12,613 16,493
Non-current:
Bank loans - 1-2 years 913 -
Bank loans - 2-5 years 3,170 -
Bank loans due after 5 years repayable by instalments - -
4,083 -
The Lloyds bank loan, on which interest was charged at both a fixed rate of
6.4% and a variable rate of 1.1% above the Bank of England base rate, was
repaid in full in January 2022. This was replaced with a loan facility from
Investec bank, in which interest is payable at a variable rate of 4.5% above
the Bank of England base rate and is repayable by April 2026.
The Lloyds bank loan was partially guaranteed by the personal assets of some
of the Directors and Key Management of the Group, which has since been
satisfied.
The book value and fair value of loans and borrowings are as follows:
2022 2021
Non-Current £'000 £'000
Bank borrowings and others
- Secured 4,083 -
Current
Bank borrowings and others
- Secured 12,613 16,493
Total loans and borrowings 16,696 16,493
Sterling 16,696 16,493
Bank borrowings and overdrafts are secured by a fixed and floating charge over
the Group's assets.
The movements in the bank and other loans are as follows:
2022 2021
Group £'000 £'000
At 1 January 16,493 5,962
New borrowings in the year 6,379 10,869
Borrowings repaid during the year (6,176) (338)
At 31 December 16,696 16,493
20. PROVISIONS
2022 2021
£'000 £'000
At 1 January 2,191 2,153
Additions during the year 1,568 38
At 31 December 3,759 2,191
Other provisions relate to an assessment of dilapidation of leasehold
properties. In each instance, management undertake surveys from time to time
to understand the work required to bring the leasehold properties back to
their original condition. The additions relate to the new leasehold properties
and the provisions at each reporting date are as follows:
21. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
The Group is exposed through its operations to the following financial risks:
· Credit risk
· Market price risk
· Cash flow and fair value interest rate risk
· Foreign exchange risk, and
· Liquidity risk.
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.
Principal financial instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
· Trade and other receivables (excluding prepayments)
· Cash and cash equivalents
· Trade and other payables
· Bank overdrafts
· Bank loans and invoice discounting
· Lease liabilities
Financial instruments by category:
Financial assets at amortised cost
2022 2021
£'000 £'000
Cash and cash equivalents 13,126 11,684
Trade and other receivables 99,188 87,650
Total financial assets at amortised costs 112,314 99,334
Financial Liabilities
Fair value through Loans and other payables
profit and loss
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade and other payables - - 87,709 81,229
Overdrafts, bank loans and invoice discounting - - 16,696 16,493
Lease liabilities - - 96,052 59,678
Total financial liabilities - - 200,457 157,400
Financial instruments not measured at fair value
These include cash and cash equivalents, trade and other receivables
(excluding prepayments), trade and other payables, overdrafts and loans and
borrowings. Due to their short-term nature, the carrying value of cash and
cash equivalents, overdrafts, trade and other receivables, trade and other
payables approximates their fair value.
The Group's activities expose it to a variety of financial risks: credit risk,
market risk (including foreign exchange risk, price risk and cashflow and fair
value interest rate risk) and liquidity risk. The financial risks relate to
the following financial instruments: cash and cash equivalents, trade and
other receivables (excluding prepayments), trade and other payables, and loans
and borrowings. The accounting policies with respect to these financial
instruments are described in note 2.
Risk management is carried out by the directors under policies, where they
identify and evaluate financial risks in close co‑operation with the Group's
operating units. The directors provide principles for overall risk management.
The reports on the risk management are produced periodically to the key
management personnel of the Group.
(a) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from credit sales. It
is Group policy, implemented locally, to assess the credit risk of new
customers before entering contracts. Such credit ratings are taken into
account by local business practices.
Credit risk also arises from cash and cash equivalents and deposits with banks
and financial institutions. For banks and financial institutions, the most
suitable bank in the local territory is selected.
A significant amount of cash is held with the following institutions:
2022* 2022 2021
Cash at bank Rating £'000 £'000
Barclays Bank plc A+ 436 737
Lloyds Bank plc A+ 725 4,274
Raiffeisen Bank AG A- 3,496 3,903
NatWest group plc A 57 14
Swedbank A+ 5,659 1,217
HSBC A+ 95 165
Bank of Transylvania BB+ 415 194
Unicredit Bulbank A- 135 30
Hipotekarna Bank N/a 260 222
Erste Bank A+ 252 187
Luminor Bank AB N/a 322 114
Ebury N/a 525 114
PKO Bank Polski N/a 244 114
Other 505 399
Total 13,126 11,684
* Based on Standard & Poor Rating
(b) Market risk
(i) Price risk
Certain aspects of the commercial terms relating to the Affinity division are,
directly linked to the commodity costs of fuel purchased by their clients at
roadside fuelling stations across Europe. As such there is a risk arising from
price changes relating to the fuel prices offered at the respective fuelling
stations. In order to manage this risk, the Group varies the way it charges
its commissions.
The table below shows the sensitivity analysis to possible changes in fuel
prices to which the Group is exposed at the end of each year, with all other
variables remaining constant. This arises due to the commercial arrangements
the Affinity division has with its clients, whereby it will generate income in
the form of commissions based on the value of fuel purchased by its clients.
2022 2021
Petrol price risk effect on net profit sensitivity analysis: £'000 £'000
Price increased by 10% 271 166
Price decreased by 10% (271) (166)
The Group is exposed to the market risk with respect to its operating income
which is subject to changes in performance, exchange fluctuations and other
market influences both economic and political. The directors manage this risk
by reviewing on a regular basis market fluctuation arising on the Group's
activities.
(ii) Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets, its income and
operating cash flows are substantially independent of changes in market
interest rates.
The risk associated with interest-bearing debts is mitigated by utilising a
mix of fixed and variable interest rate loans, as well as a Confidential
Invoice Discounting Facility ("CID").
2022 2021
Interest rate risk effect on net profit sensitivity analysis: £'000 £'000
Interest rates increased by 0.25% (42) (45)
Interest rates decreased by 0.25% 42 45
The Group's cash flow and fair value interest rate risk is periodically
monitored by the directors. The cash flow and fair value risk policy is
approved by the directors.
Receivables and trade and other payables are interest free and have settlement
dates within one year.
A sensitivity analysis is normally based on a change in an assumption while
holding all other assumptions constant. In practice, this is unlikely to
occur, and change in some of the assumptions may be correlated - for example,
change in exchange rates and change in market values.
(iii) Foreign exchange risk
Foreign exchange risk arises because the Group has operations located in
various parts of the world whose functional currency is not the same as the
presentational currency of the Group. Foreign exchange risk also arises when
individual companies enter transactions denominated in a currency other than
their functional currency. Certain assets of the Group comprise amounts
denominated in foreign currencies. Similarly, the Group has financial
liabilities denominated in foreign currency. In general, the Group seeks to
maintain the financial assets and financial liabilities in each of the foreign
currencies at a reasonably comparable level, thereby providing a natural hedge
against foreign exchange risk.
MDL BGN RSD HUF MKD
GBP Euro RON LEU LEV Dinar Forints Denar Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 December 2022
Financial assets 25,051 44,159 32,389 332 8,103 2,204 1 75 112,314
Financial liabilities 110,601 49,159 28,528 240 9,282 2,618 - 29 200,457
At 31 December 2021
Financial assets 27,235 30,487 31,812 141 7,307 2,257 2 93 99,334
Financial liabilities 82,667 32,460 32,290 77 6,655 3,027 40 184 157,400
An analysis of the Group's exposure to foreign exchange risk, illustrating the
impact on the net financial assets of a 10% movement in each of the key
currencies to which the Group is exposed, is shown below
Foreign currency risk sensitivity analysis: 2022 2021
£'000
£'000
Euro (EUR)
Strengthened by 10% (430) (53)
Weakened by 10% 430 53
Romanian Lei (RON)
Strengthened by 10% 386 (90)
Weakened by 10% (386) 90
Moldavian Leu (MDL)
Strengthened by 10% 9 7
Weakened by 10% (9) (7)
Serbian Dinar (RSD)
Strengthened by 10% (41) 38
Weakened by 10% 41 (38)
Bulgarian Lev (BGN)
Strengthened by 10% (188) 29
Weakened by 10% 188 (29)
Macedonian Denar (MKD)
Strengthened by 10% 5 (8)
Weakened by 10% (5) 8
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash flow for
operations. The Group manages its risk to shortage of funds by monitoring
forecast and actual cash flows.
The Group monitors its risk to a shortage of funds using a recurring liquidity
planning tool. This tool considers the maturity of both its financial
investments and financial assets (e.g. trade receivables, other financial
assets) and projected cash flows from operations.
Between Between
Up to 1 and 2 2 and 5 Over
12 months years years 5 years
At 31 December 2022 £'000 £'000 £'000 £'000
Trade and other payables 87,436 273 - -
Overdrafts, bank loans & invoice discounting 12,977 1,205 3,458 -
Lease liabilities 15,310 13,254 26,663 64,454
Total 115,723 14,732 30,121 64,454
Between Between
Up to 1 and 2 2 and 5 Over
12 months years years 5 years
At 31 December 2021 £'000 £'000 £'000 £'000
Trade and other payables 80,886 343 - -
Bank loans & invoice discounting 16,493 - - -
Lease liabilities 9,053 8,528 13,852 28,245
Total 106,432 8,871 13,852 28,245
22. CALLED UP SHARE CAPITAL
2022 2022 2021 2021
Ordinary Shares of £0.05 each Number £'000 Number £'000
At the beginning of the year 141,688,425 7,084 141,633,175 7,082
Issued during the year - - 55,250 2
At the end of the year 141,688,425 7,084 141,688,425 7,084
Deferred Shares of £1.00 each 50,000 50 50,000 50
Total shares at the end of the year 141,738,425 7,134 141,738,425 7,134
Shares Issued
On 8 July 2021, SP Angel exercised their option to subscribe for 55,250
Ordinary Shares at the price of £0.24 per share.
23. RESERVE DESCRIPTION AND PURPOSE
Share premium is the amount subscribed for share capital in excess of nominal
value.
Equity reserve represents the cost of the share options granted that have not
yet been exercised.
Translation reserve represents the difference arising on the translation of
the net assets and results of subsidiaries into the presentation currency.
Merger reserve represents the difference between the nominal value of
consideration paid for shares acquired in entities under common control and
the nominal value of those shares. This arises as a result of the business
combination falling outside the scope of IFRS 3 and merger accounting being
applied in place of acquisition accounting. In addition, the premium on the
fair value in excess of the nominal value of shares issued in consideration of
business combinations is credited to the merger reserve.
Retained earnings represents all other net gains and losses and transactions
with owners (e.g. dividends) not recognised elsewhere.
24. SHARE-BASED PAYMENTS
The Company has granted Directors and key management share option plans. These
are unapproved schemes so they do not satisfy the requirements of schedule 4,
ITEPA. A summary of the options plans at 31 December is shown below. All
options will vest within one to four years.
Share Option Option Price
Name No £ Vesting Period Expiry Date
LTIP - 0.05 March 2022 March 2025
CSOP 2,426,966 0.49 December 2023 February 2024
Total 2,426,966
On 5 February 2021, the Group launched a new Company Share Option Plan
("CSOP") to certain employees. The award value is between £5,000 -
£30,000 (depending on seniority within the business) divided by closing share
price on the day before grant of CSOP options with an exercise price
equivalent to 110% of the closing share price on the day before grant. These
options vest three years from the award date and are subject to meeting a
performance criteria of an average earnings per share (EPS) growth of 10% per
annum, from 1 January 2021 to 31 December 2023.
On 3 March 2021, the company awarded 2,430,291 to Robert Ross and Mike
Williamson under a long term investment plan (LTIP). Both employees have since
left the company and the options have lapsed.
Options will normally lapse on cessation of employment. However, exercise is
permitted for a limited period following cessation of employment for specified
reasons, such as redundancy, retirement, ill-health, and, in other
circumstances, at the discretion of the Remuneration Committee.
The movements in share options are as follows:
2022 2021
No No
At 1 January 2,986,111 55,250
Share options exercised during the year - (55,250)
Share options granted during the year 449,438 5,598,830
Share options lapsed during the year (1,008,583) (2,612,719)
At 31 December 2,426,966 2,986,111
Weighted average share price of options £0.49 £0.45
Weighted average grant fair value £0.11 £0.13
Weighted average contractual life 12 months 25 months
Exercise price £0.49 £0.45
The weighted average grant fair value at the year was 2022 £0.11 (2021:
£0.13) per option. The outstanding options have a weighted average
contractual life of 24 months (2021: 25 months), and exercise price between
£0.15 and £0.49 (2021: between £0.05 and £0.49).
Options were valued using the Black-Scholes option pricing model. No
performance conditions were included in the fair value calculations. Expected
dividends are not incorporated into the fair value calculations. The fair
value per option granted and the assumptions used in the calculations are as
follows:
2022 2021
Risk free investment 2.30% 2.15%
Expected life 12 Months 25 Months
Expected volatility 37.07% 39.56%
The Group recognised a total credit of £108,000 (2021: charge of £107,000)
relating to equity-settled share-based payments in light of recent share
prices of the Company.
25. LEASES
The Group as a lessee
The Group's leases consist primarily of property premises and equipment and is
presented below:
Right-of-use assets
Property
Premises Equipment Total
Group £'000 £'000 £'000
COST
At 1 January 2022 68,315 7,658 75,973
Additions 35,479 11,424 46,903
Disposals (1,291) (535) (1,826)
Exchange differences 803 137 940
At 31 December 2022 103,306 18,684 121,990
DEPRECIATION
At 1 January 2022 16,164 1,488 17,652
Charge for the year 9,394 3,055 12,449
Eliminated on disposal (1,284) (437) (1,721)
Exchange differences 283 24 307
At 31 December 2022 24,557 4,130 28,687
NET BOOK VALUE
At 31 December 2022 78,749 14,554 93,303
At 31 December 2021 52,151 6,170 58,321
Property
Premises Equipment Total
Group £'000 £'000 £'000
COST
At 1 January 2021 41,378 2,247 43,625
Additions 32,426 6,010 38,436
Disposals (4,461) (570) (5,031)
Exchange differences (1,028) (29) (1,057)
At 31 December 2021 68,315 7,658 75,973
DEPRECIATION
At 1 January 2021 11,223 803 12,026
Charge for the year 7,379 1,204 8,583
Eliminated on disposal (2,223) (506) (2,729)
Exchange differences (215) (13) (228)
At 31 December 2021 16,164 1,488 17,652
NET BOOK VALUE
At 31 December 2021 52,151 6,170 58,321
At 31 December 2020 30,155 1,444 31,599
Lease liabilities included in the consolidated statement of financial position
2022 2021
£'000 £'000
Current 12,287 9,053
Non-Current 83,765 50,625
Total 96,052 59,678
Amount recognised in the consolidated income statement
2022 2021
£'000 £'000
Depreciation on right-of-use property premises 9,394 7,379
Depreciation charged on other right-of-use assets 3,055 1,204
Interest on lease liabilities 2,161 1,637
Total 14,610 10,220
The total cash outflow for leases during the current year was £14,023,000
(2021: £9,347,000). Further lease disclosures are in note 29.
26. RELATED PARTY TRANSACTIONS
During the year Group companies entered into the following transactions with
related parties who are not members of the Group.
Sales Purchases Amounts owed by Amounts owed to
2022 2021 2022 2021 2022 2021 2022 2021
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Related Party
Delamode Holding BV 114 - - - - - - 116
Delamode Propretati, Srl - - - 4 - - - -
Cogels Investment BV - 1 - - - - - -
EshopweDrop Baltics 199 - - - 72 - - -
EshopweDrop Romania 17 - - - 2 - - -
EshopweDrop Holdings - - - - 3 - - -
Franchisees
Delamode (SW) Limited 410 215 29 - 58 25 8 -
Delamode Latvia SA 485 - 189 - 67 - 22 -
Companies in which directors or their immediate family have a significant
controlling interest
Board Mentoring Limited - - 128 - - - 65 -
Sebastian Associates Limited - - 230 - - - 72 -
Delamode Holding BV, is indirectly owned by Shaun Godfrey, Sandu Grigore, and
Cogels Investments Limited all of whom are shareholders of Xpediator Plc.
Delamode Properitati Srl, a Company owned by Delamode Holding BV, is the
landlord of one of the Group's leasehold properties in Romania. Rent payable
under the current lease is at market rates. Shaun Godfrey, Sandu Grigore and
Cogels Investment Limited are shareholders of Xpediator Plc.
Cogels Investment BV is a Company owned by Stephen Blyth, a director of Cogels
Investments Limited who are a shareholder of Xpediator Plc.
EshopweDrop Baltics, EshopweDrop Romania and EshopweDrop Holdings are all
entities partly owned by Stephen Blyth, a director of Cogels Investments
Limited who are a shareholder of Xpediator Plc.
Delamode (SW) Limited ("DSW") is a franchisee of the Group. In 2018, Delamode
Holdings Limited entered into a franchise agreement with DSW, with Shaun
Godfrey acting as a Director for both companies. The Group provides certain
administrative functions on behalf of DSW and charges a fee at an agreed rate
and under the franchise agreement is entitled to a share of the profits.
Delamode Latvia SA is a new franchisee of the Group. During 2022, Delamode
Baltics UAB entered into a franchise agreement with Delamode Latvia SA.
Details of directors' remuneration and the remuneration of key management
personnel are given in note 6.
All related party transactions were made at an arm's length basis.
27. EXCEPTIONAL ITEMS
During the year, the Group incurred non-recurring costs totalling £483,000
(2021: £2,610,000)
An analysis by type of expense is show below.
2022 2021
£'000 £'000
Relocation costs - 1,654
Compensation for loss of office and associated recruitment costs 143 539
Financing negotiation fees - 116
Costs associated with offer received for share capital of Xpediator plc 148 -
Redundancy and restructuring 40 -
Aborted acquisition costs 152 301
Total 483 2,610
28. SUBSEQUENT EVENTS
On 4 May 2023, the Board recommended an Offer from DLM Bidco Limited (a newly
incorporated entity indirectly owned by a consortium including the Company's
largest shareholder, Cogels Investments Limited ("Cogels"), the investment
vehicle of close family members of Stephen Blyth (former CEO of Xpediator),
funds managed by Baltcap, one of the largest private equity investors in the
Baltic states, and Justas Versnickas, the Managing Director of, and 20%
shareholder in, Delamode Baltics UAB, a subsidiary of Xpediator Plc (together
the "Consortium") to acquire the entire issued, and to be issued, share
capital of the Company. The Offer is for 42p per share and a special dividend
of 2p per share and values the Company at approximately £62.3m. Shareholder
meetings will be held on 7 June 2023 at which eligible shareholders will vote
on the proposed Offer.
On 5 April 2023, Xpediator and the Consortium referred to above, entered into
a co-operation agreement in relation to the Offer (the "Co-operation
Agreement"). Under the terms of the Co-operation Agreement, the parties
agreed, amongst other things, that a cash award be made to Richard Myson,
Xpediator's CFO, in lieu of his entitlement to receive an award under the
Xpediator LTIP ("Cash Award"). The maximum cash amount payable pursuant to the
Cash Award will be calculated as 346,391 Xpediator Shares multiplied by the
Cash Offer per Xpediator Share. The Cash Award will vest and become payable on
the Effective Date of the Offer.
29. NATURE OF LEASES
The Group leases a number of properties in the jurisdictions from which it
operates. In some jurisdictions it is customary for lease contracts to provide
for payments to increase each year by inflation or and in others to be reset
periodically to market rental rates. In some jurisdiction's property leases
the periodic rent is fixed over the lease term.
The Group also leases certain items of plant and equipment. In some contracts
for services with distributors, those contracts contain a lease of vehicles.
Leases of plant, equipment and vehicles comprise only fixed payments over the
lease terms.
The percentages in the table below reflect the current proportions of lease
payments that are either fixed or variable.
The sensitivity reflects the impact on the carrying amount of lease
liabilities and right-of-use assets if there was an uplift of 1% on the
statement of financial position date to lease payments that are variable.
Lease Fixed Variable
Contract Payments Payments Sensitivity
Number % % £'000
Property leases with payments linked to inflation 3 - 1% 605
Property leases with fixed payments 37 12% - -
Leases of plant & equipment 165 55% - -
Vehicle leases 96 32% - -
Total 301 99% 1% 605
30. ANALYSIS OF CHANGES IN NET DEBT
Non-cash
interest
At 31 Right-of- Right-of- charge Other At 31
December Foreign Use-asset use asset right-of- non-cash December
2021 Cashflow exchange additions disposals use assets movements 2022
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cash at bank 11,684 (65) 1,507 - - - - 13,126
Short term deposits - - - - - - - -
Total cash 11,684 (65) 1,507 - - - - 13,126
Overdrafts - 879 - - - - - 879
Confidential invoice discounting facility 14,602 (3,780) - - - - - 10,822
Bank loans 1,891 3,104 - - - - - 4,995
Right-of-use-assets 59,678 (14,023) 648 46,903 (94) 2,243 697 96,052
Total debt 76,171 (13,820) 648 46,903 (94) 2,243 697 112,748
Net debt (64,487) (99,622)
Net debt excluding right-of-use assets (4,809) (3,570)
Non-cash
interest
At 31 Right-of- Right-of- charge Other At 31
December Foreign Use-asset use asset right-of- non-cash December
2020 Cashflow exchange additions disposals use assets movements 2021
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cash at bank 10,963 1,793 (1,072) - - - - 11,684
Short term deposits 1,757 (1,757) - - - - - -
Total cash 12,720 36 (1,072) - - - - 11,684
Confidential invoice discounting facility 10,870 - - - - - 14,602
3,732
Bank loans 2,230 (339) - - - - - 1,891
Right-of-use-assets 32,240 (9,346) (842) 38,436 (2,447) 1,637 - 59,678
Total debt 38,202 1,185 (842) 38,436 (2,447) 1,637 - 76,171
Net debt (25,482) (64,487)
Net cash/(debt) excluding right-of-use assets (4,809)
6,758
Non-cash items relate to right-of-use-assets accounting under IFRS16, which
the directors consider would misrepresent the net cash/(debt) position of the
Group. Further details on right-of-use-assets / leases can be found in note 25
to these Consolidated financial statements.
Reconciliation of net cash flow to movement in net debt
2022 2021
£'000 £'000
Net (decrease)/increase in cash and cash equivalents (944) 36
Net increase in borrowings and right-of-use assets (35,050) (38,811)
Foreign exchange movements 859 (230)
Increase in net debt (35,135) (39,005)
Opening net debt (64,487) (25,482)
Closing net debt (99,622) (64,487)
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
2022 2021
Notes £'000 £'000
ASSETS
NON-CURRENT ASSET
Intangible assets 3 236 418
Property, plant and equipment 4 127 217
Investments 5 54,866 63,668
Deferred Tax 640 640
55,869 64,943
CURRENT ASSETS
Trade and other receivables 6 9,254 10,441
Cash and cash equivalents 271 59
9,525 10,500
TOTAL ASSETS 65,394 75,443
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 9 7,134 7,134
Share premium 10 13,149 13,149
Equity reserve 10 - 108
Merger reserve 10 24,694 24,694
Retained earnings 10 749 3,366
TOTAL EQUITY 45,726 48,451
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing loans and borrowings 8 4,083 -
4,083 -
CURRENT LIABILITIES
Interest bearing loans and borrowings 8 912 -
Trade and other payables 7 14,673 26,992
15,585 26,992
TOTAL LIABILITIES 19,668 26,992
TOTAL EQUITY AND LIABILITIES 65,394 75,443
The Company made a loss in the year of £1,766,000 (2021: profit of
£2,715,000).
Richard Myson
CFO
22 May 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
FORTHE YEAR ENDED 31 DECEMBER 2022
Share Share Equity Merger Retained
capital premium reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 7,134 13,149 108 24,694 3,366 48,451
Contribution by and distribution to owners
Dividends paid - - - - (851) (851)
Share options credit - - (108) - - (108)
Total contributions by and distribution to owners 7,134 13,149 - 24,694 2,515 47,492
Loss for the year - - - - (1,766) (1,766)
At 31 December 2022 7,134 13,149 - 24,694 749 45,726
Share Share Equity Merger Retained
capital premium reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 7,132 13,139 1 24,694 2,848 47,814
Contribution by and distribution to owners
Dividends paid - - - - (2,197) (2,197)
Share options granted - - 107 - - 107
Share options exercised 2 10 - - - 12
Total contributions by and distribution to owners 7,134 13,149 108 24,694 651 45,736
Profit for the year - - - - 2,715 2,715
At 31 December 2021 7,134 13,149 108 24,694 3,366 48,451
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with Financial
Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act
2006. The financial statements have been prepared under the historical cost
convention.
The Company has taken advantage of the following disclosure exemptions in
preparing these financial statements, as permitted by FRS 101 "Reduced
Disclosure Framework":
· the requirements of paragraphs 45(b) and 46 to 52 of IFRS
2 Share-based Payment;
· the requirements of paragraphs 62, B64(d), B64(e),
B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii),
B66 and B67 of IFRS 3 Business Combinations;
· the requirements of paragraph 33(c) of IFRS 5 Non-Current
Assets Held for Sale and Discontinued Operations;
· the requirements of IFRS 7 Financial Instruments:
Disclosures;
· the requirements of paragraphs 91 to 99 of IFRS 13 Fair
Value Measurement;
· the requirement in paragraph 38 of IAS 1 Presentation of
Financial Statements to present comparative information in respect of:
· paragraph 79(a)(iv) of IAS 1;
· paragraph 73(e) of IAS 16 Property, Plant and Equipment;
· paragraph 118(e) of IAS 38 Intangible Assets;
· the requirements of paragraphs 10(d), 10(f), 16, 38A,
38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of Financial
Statements;
· the requirements of paragraphs 134 to 136 of IAS 1
Presentation of Financial Statements;
· the requirements of IAS 7 Statement of Cash Flows;
· the requirements of paragraphs 30 and 31 of IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors;
· the requirements of paragraphs 17 and 18A of IAS 24
Related Party Disclosures;
· the requirements in IAS 24 Related Party Disclosures to
disclose related party transactions entered into between two or more members
of a Group;
· the requirements of paragraphs 134(d) to 134(f) and
135(c) to 135(e) of IAS 36 Impairments of Assets.
Merger accounting
On 25 May 2017 the Company entered into a share swap agreement with the
ultimate beneficiaries of Delamode Group Holdings Limited, whereby 4,000,000
new ordinary shares of £1.00 each were issued to the ultimate beneficiaries
of Delamode Group Holdings Limited in exchange for their shares in Delamode
Group Holdings Limited in the same proportion as their shareholding in
Delamode Group Holdings Limited. The merger method of accounting is used to
consolidate the results of Xpediator Plc.
Where merger relief is applicable, the cost of the investment is recorded at
the fair value on the date of the transaction at below. The difference between
the fair value of the investment and the nominal value of the shares (plus the
fair value of any other consideration given) is shown as a merger relief
reserve and no share premium is recognised.
On 8 June 2018, the Company issued 1,727,694 new ordinary shares of £0.05
each as part of the deferred consideration of Easy Managed Transport Limited.
On 13 July 2018, the Company issued 3,740,648 new ordinary shares of £0.05
each as part of the acquisition of Import Services Limited. On 31 December
2018, the Company issued 84,951 new ordinary shares of £0.05 each as part of
the deferred consideration of Regional Express Limited. On 16 May 2019, the
Company issued 1,655,876 shares to the former owners of Easy Managed Transport
Limited as part of the final payment of the deferred consideration of Easy
Managed Transport Limited. On 5 December 2019, the Company issued 89,744 new
ordinary shares of £0.05 each as part of the final deferred consideration of
Regional Express Limited.
Going concern
The directors have concluded that it is appropriate that the financial
statements have been prepared on a going concern basis given the cash balances
as at 31 December 2022, and funding facilities in place across the Group,
which it does not envisage will be withdrawn thus there are sufficient funds
available to meet its liabilities as they fall due for a period of not less
than 12 months from the date of approval of the financial statements. The
directors believe that based on the current budgets and forecast cash flows,
there is sufficient resources to meet its liabilities as they fall due. The
financial statements have therefore been prepared on a going concern basis.
However, on 4 May 2023, the Board recommended an Offer from DLM Bidco Limited
(a newly incorporated entity indirectly owned by a consortium including the
Company's largest shareholder, Cogels Investments Limited, the investment
vehicle of close family members of Stephen Blyth (former CEO of Xpediator),
funds managed by Baltcap, one of the largest private equity investors in the
Baltic states, and Justas Versnickas, the Managing Director of, and 20%
shareholder in, Delamode Baltics UAB, a subsidiary of Xpediator Plc to acquire
the entire issued, and to be issued, share capital of the Company, which may
complete within the next 12 months. Details of the Offer are available on our
investor website (https://xpediator.com/offer-for-xpediator
(https://xpediator.com/offer-for-xpediator%20) )
Whilst completion of the Offer is subject to approval by eligible shareholders
at the shareholder meetings scheduled for 7 June 2023 and sanction by the High
Court of Justice in England and Wales, the Group and Company continues to
operate autonomously with the assumption that trading will continue
post-acquisition as modelled in the detailed forecasts, without adjustments to
reflect any incremental costs or expected benefits should the acquisition go
ahead. As the directors do not have visibility over the future intentions of
the potential acquirer, there can be no certainty over the nature of the
continuing operations of the Group and Company should the acquisition proceed
successfully. This gives rise to a material uncertainty, as defined in
auditing and accounting standards, related to events or conditions that may
cast significant doubt on the Group and the Company's ability to continue as a
going concern and in such circumstances, the Group and the Company may
therefore be unable to realise its assets and discharge its liabilities in the
normal course of business.
Intangible assets
Externally acquired intangible assets, are initially recognised at cost and
subsequently amortised on a straight-line basis over their useful economic
lives.
The significant intangibles recognised by the Company, their useful economic
lives and the methods used to determine the cost of intangibles are as follows
Licences and Software
- 25%-33% straight line
Property, Plant & Equipment
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life or, if held under a finance lease,
over the lease term, whichever is the shorter.
Computer Equipment
- 20%-33% straight line
Fixture &
Fittings
- 20%-33% straight line
Leasehold Improvements - 33%
straight line
Fixed assets are stated at cost less depreciation and provision for
impairment.
Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantially enacted by the reporting date.
Foreign currencies
The financial statements of the Company are presented in its reporting
currency of Sterling. The functional currency of the Company is the UK
Sterling.
Assets and liabilities in foreign currencies are translated into sterling at
the rates of exchange ruling at the statement of financial position date.
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of transaction. Any gains or losses arising from
these conversions are credited or charged to the Income Statement.
Employee benefit costs
The Company operates a defined contribution pension scheme on behalf of
employees in the UK in accordance with auto enrolment legislation.
Contributions payable to the company's pension scheme are charged to the
income statement in the period to which they relate.
Investments
Investments in subsidiaries are at cost less any provision for impairment. The
Company assesses investments for impairment whenever events or changes in
circumstances indicate that the carrying value of an investment may not be
recoverable. If any such indication of impairment exists, the Company makes an
estimate of the recoverable amount of the investment. If the recoverable
amount is less than the value of the investment, the investment is considered
to be impaired and is written down to its recoverable amount. An impairment
loss is expensed immediately; if the impairment is not considered to be a
permanent diminution in value, it may reverse in a future period to the extent
it is no longer considered necessary.
Other financial assets
Classification
The Company classifies its financial assets in the following measurement
categories:
· those to be measured subsequently at fair value (either
through OCI or through profit or loss); and
· those to be measured at amortised cost.
The classification depends on the contractual terms of the cash flows.
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Company has
transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at FVPL are expensed in profit or loss. Financial assets with embedded
derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest.
Impairment
The Company assesses, on a forward-looking basis, the expected credit losses
associated with its debt instruments carried at amortised cost and fair value
through other comprehensive income (FVOCI). The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
Trade, Intercompany and other receivables
The Company assesses on a forward-looking basis the expected credit loss
associated with its receivables carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Company applies the simplified
approach permitted by IFRS 9, resulting in trade receivables recognised and
carried at original invoice amount less an allowance for any uncollectible
amounts based on expected credit losses.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash
at bank and in hand and short-term deposits with original maturities of three
months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
Financial liabilities
The Company classifies its financial liabilities into two categories:
Other financial liabilities
The Company's other financial liabilities include bank loans, confidential
invoice discounting facility, trade and other payables and accruals. Bank
borrowings are initially recognised at fair value net of any transaction costs
directly attributable to the issue of the instrument. Such interest-bearing
liabilities are subsequently measured at amortised cost using the effective
interest rate method, which ensures that any interest expense over the period
to repayment is at a constant rate on the balance of the liability carried in
the consolidated statement of financial position. For the purposes of each
financial liability, interest expense includes initial transaction costs and
any premium payable on redemption, as well as any interest or coupon payable
while the liability is outstanding.
Trade payables and other short-term monetary liabilities, which are initially
recognised at fair value and subsequently carried at amortised cost using the
effective interest method.
Fair value through profit and loss
This category only comprises of the element of deferred consideration on
business combinations, which is contingent on the performance of the acquired
businesses. The expected consideration payable is assessed at each reporting
date with the movement in the expected liability being recorded in the income
statement.
Share-based payments
The Company operates equity-settled share-based options plans. The fair value
of the employee services received in exchange for the participation in the
plan is recognised as an expense in the profit and loss account. The
corresponding credit has been recognised in the profit and loss account
reserve.
The fair value of the employee is based on the fair value of the equity
instrument granted. This expense is spread over the vesting period of the
instrument.
1.1 Critical accounting estimates and judgements
Impairment of Fixed Asset Investments
The Company makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions.
Impairment tests on investments are undertaken annually in November as part of
the Company's budgeting process, except in the year of acquisition when they
are tested at the year-end.
In preparing these financial statements, the key estimates relate to:
· The determination of the carrying value of the Company's
investments in its subsidiary undertakings. During the year, the directors
undertook an impairment assessment in line with the accounting policy. The
directors recognised an impairment of £8,802,000 with respect to the
Company's investment in the UK Freight Forwarding business which had been
determined by reference to the recoverable value calculated in determining the
impairment of goodwill, as set out in note 12 to the Group financial
statements. Further details can be found in note 5 to the Company's financial
statements.
2. STAFF COSTS
Compensation consists of 2 executive Directors, 3 non-executive Directors and
57 other employees (2021: 2 executive Directors, 4 non-executive Directors and
70 other employees).
2022 2021
£'000 £'000
Employee benefit expenses (including directors) comprise:
Salaries 4,158 4,176
Short-term non-monetary benefits 26 27
Share based payments (credit)/charge (108) 108
Social security contributions and similar taxes 553 463
Defined contribution pension cost 71 71
Total 4,700 4,845
3. INTANGIBLE ASSETS
COST
Licences & Software £'000
At 1 January 2022 750
Additions 21
At 31 December 2022 771
AMORTISATION
Licences & Software
£'000
At 1 January 2022 332
Charge for the year 203
At 31 December 2022 535
NET BOOK VALUE
Licences & Software £'000
At 31 December 2022 236
At 1 January 2022 418
4. PROPERTY, PLANT & EQUIPMENT
Leasehold Fixture & Computer
Improvements Fittings Equipment Total
£'000 £'000 £'000 £'000
COST
At 1 January 2022 49 16 420 485
Additions - - 19 19
At 31 December 2022 49 16 439 504
DEPRECIATION
At 1 January 2022 42 14 212 268
Charge for the year 7 2 100 109
At 31 December 2022 49 16 312 377
NET BOOK VALUE
At 31 December 2022 - - 127 127
At 1 January 2022 7 2 208 217
5. FIXED ASSET INVESTMENTS
Subsidiary
Undertakings
£'000
At 1 January 2022 63,668
Additions during the year -
Impairments (8,802)
At 31 December 2022 54,866
Impairment
The carrying amount of investments has been reduced to its recoverable value
through recognition of an impairment loss. There were impairments recognised
during the year of £8,802,000 (2021: £nil). In addition, there were no
impairment reversals in 2022 (2021: £nil). The recoverable value was
calculated using a value in use calculation based on the estimates set out in
note 12 of the Group financial statements.
6. TRADE AND OTHER RECEIVABLES
2022 2021
£'000 £'000
Current:
Trade receivables 3 20
Amounts owed from group undertakings 7,688 8,153
Contract assets 159 -
Prepayments 100 144
Other receivables 1,304 2,124
Total trade and other receivables 9,254 10,441
7. TRADE AND OTHER PAYABLES
2022 2021
£'000 £'000
Current:
Trade payables 1,153 1,157
Amounts owed to group undertakings 12,392 24,173
Other taxes and social security 108 308
Accruals and deferred income 1,020 1,354
Total trade and other payables 14,673 26,992
8. BANK AND OTHER LOANS
2022 2021
£'000 £'000
Current:
Bank loans 912 -
912 -
Non-current:
Loans - 1-2 years 913 -
Loans - 2-5 years 3,170 -
Loans due after 5 years repayable by instalments - -
4,083 -
During the year the Company received a loan facility from Investec bank, on
which interest is payable at a variable rate of 4.5% above the Bank of England
base rate and is repayable by April 2026.
The book value and fair value of loans and borrowings are as follows:
2022 2021
Non-Current £'000 £'000
Bank borrowings and others
- Secured 4,083 -
Current
Bank borrowings and others
- Secured 912 -
Total loans and borrowings 4,995 -
Sterling 4,995 -
9. SHARE CAPITAL
See consolidated financial statements note 22 for share capital section.
10. RESERVES
Share premium is the amount subscribed for share capital in excess of nominal
value.
Equity reserve represents the cost of the share options granted that have not
yet been exercised.
Merger reserve represents the difference between the net asset value of
Delamode Group Holdings Limited and the nominal value of the shares issued by
Xpediator Plc in consideration for the acquisition of Delamode Group Holdings
Limited. In addition, the premium on the fair value in excess of the nominal
value of shares issued in consideration for business combinations is credited
to the merger reserve.
Retained earnings represents all other net gains and losses and transactions
with owners (e.g. dividends) not recognised elsewhere.
11. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the disclosure of related party
transactions with wholly owned fellow Group companies. Related party
transactions with key management personnel (including Directors) are shown in
note 26 of the consolidated financial statements.
12. SHARED-BASED PAYMENTS
Share-based payments arrangements for employees are set out in the Directors'
Report (Remuneration note). Details of the share options in existence are
shown in note 24 of the consolidated financial statements.
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