TIDMCRL
RNS Number : 1662I
Creightons PLC
01 December 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2022
Financial highlights
-- Sales for the first half of the financial year were GBP30m
(2021: GBP30m); including GBP2.6m (2021: GBP0.8m) from recent
acquisitions. This represents a very commendable performance given
the challenges outlined at the March 2022 results presentation.
-- The gross margin averaged 40.4% (2021: 42.7%) reflecting the
ongoing struggle to pass on significant direct cost increases to
retailers, contract customers and consumers. We anticipate that
selling price improvement now agreed will help the gross margin
continue on the upward trend evident in recent months.
-- During the period since November 21 the company suffered
direct annualised cost increases approximating to GBP4m, reflecting
the scale of the margin challenge. High street retailers agreed to
take price increases varying from 5% to 15% to stabilise their
supply. "No agreement - no supply" had to be the rule to ensure our
return to profit.
-- Most cost increases have now been successfully passed on to
the retailers, contract customers or consumers. A small number of
price increases remain outstanding, which will be addressed by cost
mitigation or cessation of supply.
-- Other overheads, mainly energy costs, increased dramatically
with the potential to drive annualised overheads up by at least
GBP0.7m. A strategy to drive down annualised overheads by GBP2m
thus reducing the breakeven point and protecting margin has been
implemented and already contributed GBP0.1m to the turnaround to
profit in the six months.
-- The operating profit before exceptional costs was GBP0.3m
(2021: GBP2.6m). O perating losses in the first four months were
turned to operating profit for each of the subsequent months from
August 22 to end of October 22, reflecting the continuing success
of the remedial actions taken.
-- Operating profit before exceptional costs as a percentage of
sales decreased by 7.7% points to 0.9% (2021: 8.6%). Although
small, this reflects strong signals of a sharp recovery to
profit.
-- EBITDA (excluding exceptional) for the first half of the
financial year 2022 was GBP1.1m (2021: GBP3.35m).
-- Diluted EPS was negative 0.48p (2021: 2.61p).
-- Net short-term borrowings (cash and cash equivalents less
short-term element of obligations under finance leases and
borrowings) at 30 September 2022 were GBP4.7m (2021: GBP2.9m). This
included the final payment for Emma Hardie Ltd of GBP1.4m and a
share buyback of GBP0.6m. Similarly for cash flow, large negatives
in the early months of the year have been reduced to a positive
cash flow in November with positives expected in the future months
of this financial year and beyond. The positive cashflow has been
enabled by the realignment of buying and stock holding policy
together with cost reduction measures.
-- Against this challenging economic climate, the integration of
the acquisitions, despite their long-term importance, were put on
hold for several months whilst the ship was steadied. Revenue
generated from Brodie and Stone brands was GBP1.2m (2021: GBPNil),
Emma Hardie Ltd was GBP1.4m (2021: GBP0.8m from date of
acquisition).
Operational highlights
-- The key priority of the business has been to re-establish
profitability and embed a structure to protect against losses on a
month to month basis in this highly inflationary and volatile
economic environment.
-- At a macro level this meant aiming to pass on approximately
GBP6m (annualised) of selling price increases to customers and
consumers and reducing overhead and potential overhead costs by
GBP2m from previous year levels.
-- At a more detailed level this involved:
o Sales team setting up Cost Price Increase (C.P.I) monitors
across all categories of supply as negotiating levers with the big
retailers, which has proved successful (with the obvious time lag
in passing on increases which affected margins in the earlier part
of the year).
o Manufacturing team reducing to one shift at both production
sites (excluding soap production). This was made possible by
ensuring that previous investment in machinery and equipment was
brought into play - efficiencies and line utilisation made this
possible. Unfortunately, 34 people were made redundant out of the
direct labour pool and a further 13 people as indirect labour at a
total cost of GBP0.15m as shown in exceptional costs.
o The one shift policy reduced energy costs. Energy savings were
further enhanced by a reduction in energy consumption and
implementation of an efficient energy management/reduction
policy.
o The spare capacity on one shift is currently around 25% due to
efficiency gains.
o Restructuring warehousing and logistics to bring back in house
the picking and packing of all goods; a task that is already in
progress and will be finalised by the end of January 2023 with
considerable cost reductions in the region of GBP0.3m
annualised.
o Stock reductions based on a four-week buying and stock holding
policy and reducing lead times are targeted at GBP2m. This will
improve cash flow and will also reduce costs. We have achieved
stock reductions of GBP1.2m to the end of October 2022 without any
reduction in effective service level.
-- Exceptional costs also include GBP0.31m in relation to the
finalisation of the Emma Hardie transaction.
-- Integration of Emma Hardie, though delayed, is now
progressing well and the full benefits are expected to emerge
during the second half of the financial year and beyond. Planned
profit improvements include bringing operation and manufacturing in
house whilst also developing new bricks and mortar listing in UK
and USA under a newly appointed Sales Director as we transition
from the previous owners.
-- The same is true on the Brodie and Stone brands, which have
experienced stock shortages on some products caused by the global
logistics issues earlier in the year.
-- Most importantly we can now focus on building sales in all
sectors; the most recent success is being listed with two
sophisticated high street retailers in the convenience area which
are experiencing significant growth.
-- In the mass to masstige area we are pushing our three key
brands (in the hair, sleep and skin categories) in addition to Emma
Hardie in the premium skincare sector.
-- We expect to hold our sales levels for the next six months
before we start to build steadily again on a profitable
business.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2022
Chairman's statement
As we indicated in the Chairman's statement in July 2022, we
experienced global supply chain and inflationary pressures during
the second half of the last financial year which have continued
into this year. These pressures have manifested in the form of
delayed deliveries from suppliers, higher input, energy and
overhead costs. We have therefore continued our proactive response
to these challenges and have striven to mitigate the on-going
increases in cost of raw materials, components and energy through
price recovery where possible, product reengineering, alternative
sourcing and other cost control measures, including reduction in
the work force and reversion to single-shift working. This has
resulted in redundancy costs of GBP0.15m. In spite of these
challenges, I am pleased to report that the Group has made
significant progress in growing its branded business during the
first half of the year ended 30 September 2022. Overall sales are
broadly in line with last year, with sales from the two branded
acquisitions offsetting the decline in other areas. The Group's
performance is a tribute to the tenacity and resilience of the
teams who have again demonstrated the ability to take advantage of
available opportunities and manage potential risks.
Sales and margin
Branded sales contribute an increasingly important part of the
business with branded sales increasing from GBP8.8m to GBP10.8m.
This includes the turnover from acquisitions of GBP2.6m (2021:
GBP0.8m).
Private label sales declined from GBP13.1m to GBP11.2m due
mainly to a one-off customer order in the previous period. Contract
sales reduced from GBP8.1m to GBP7.7m.
Our gross margin was 40.4% in the six months to 30 September
2022 (2021: 42.7%). Gross margin has declined in the period due to
a lag in the recovery from our customers of higher input costs. The
level of cost price increases has abated in recent months and we
have made significant progress in securing price increases from
customers and therefore we expect to achieve an improved gross
margin in the next six months.
Overheads
Distribution costs have increased by 17.4% to GBP2.0m (2021:
GBP1.7m) and now represent 6.6% of sales (2021: 5.5%). Underlying
costs associated with outsourcing the warehousing have increased in
line with domestic supply pressures. Most of our finished goods are
currently stored at third parties but we are in the process of
taking back the storage and picking of finished goods within
Peterborough, which will result in savings in the second half.
Administration costs have increased by 14.2% to GBP9.8m (2021:
GBP8.6m). These include admin support costs within Emma Hardie
Limited of GBP0.6m (2021: GBP0.2m - 2 months post acquisition),
which are required to support the brand during the transition
period. Other cost increases include energy cost increases of
GBP0.3m, I.T. and security of GBP0.1m which will reduce in the
second half of the year.
Exceptional Costs
-- In our report on the results for March 2022, we indicated
that there would be an additional charge in respect of the
acquisition of the Emma Hardie business should the Company's share
price fail to attain GBP1.25 on the first anniversary of the sale.
The excess over the amount accrued at 31 March 2022 amounted to
GBP0.31m and has been treated as an exceptional cost.
-- Redundancy costs incurred of GBP0.15m in respect of the
closure of the second shift at Peterborough have also been included
in exceptional costs.
Operating profit before exceptional costs
Operating profit before exceptional costs was GBP0.3m (2021:
GBP2.6m), which represents a decrease of GBP2.3m. The reduction in
gross margin together with the increased overhead costs results in
an operating profit margin before exceptional costs of 0.9% (2021:
8.6%).
Tax
The tax charge provided in the accounts is GBP0.03m (2021:
GBP0.28m).
Earnings per share
The diluted earnings per share was negative 0.48p (2021:
2.61p).
Dividend Payments
The Board does not propose an interim dividend (2021: 0.15 pence
per ordinary share), reflecting the challenging and volatile
economic conditions facing the Group and the need to be prudent
about utilisation of cash resources.
This is consistent with the directors' objective to align future
dividend payments to the future underlying earnings and cash
requirements of the business.
Working capital and short term borrowings
Net short term borrowings were GBP4.7m (2021: GBP2.9m). The
increase in short term borrowings is largely a result of the Emma
Hardie acquisition, which resulted in a cash out flow of GBP2.0m.
The Group has access to cash by way of an invoicing finance
facility that is currently in place and could support the cash
position by up to a further GBP4.4m. Working capital is broadly in
line with March 22 with increases in trade debtors and inventories
offset by an increase in trade creditors. We plan to make further
reduction in inventories in the second half of the year.
Supply chain
In common with most UK manufacturing businesses, we are
operating in a period of significant inflationary pressures and
weakening consumer demand. Our objective is to meet our customer
expectations and to deliver top line sales growth whilst also
relentlessly focusing on the areas within our control including
recovery/mitigation of cost price increases, delivery of cost
reduction programme and reduction in stock levels.
The result for this half year is much in line with what was
anticipated, but we are confident that the margin recovery and
pro-active cost reduction measures we have taken will deliver an
improved performance in the second half of the year. I would like
to take this opportunity to thank each and every one of the Group's
employees who have continued to pull together through an
exceptionally difficult period to enable the Group to deliver a
strong trading performance. I would also like to thank our
customers, shareholders and suppliers for their support and loyalty
to the Group.
W O McIlroy
Executive Chairman 30 November 2022
Responsibility statement
The names and functions of the Directors of the Company are as
follows:
William O McIlroy Executive Chairman and Chief Executive
Bernard JM Johnson Executive Managing Director
Nicholas DJ O'Shea Non-executive Director and Group Company Secretary
William T Glencross Non-executive Director
Martin Stevens Deputy Managing Director
Philippa Clark Deputy Managing Director
Paul Forster Non-executive Director
The Board confirms that to the best of its knowledge the
condensed set of financial statements gives a true and fair view of
the assets and liabilities, financial position and loss of the
Group and has been prepared in accordance with IAS 34 'Interim
Financial Reporting', as endorsed by the UK and that the interim
management report includes a fair review of the information
required by the Disclosure and Transparency Rules as issued by the
Financial Conduct Authority, namely:
-- DTR 4.2.7: An indication of important events that have
occurred during the first six months of the financial year, and
their impact on the condensed set of financial statements, and a
description of the principal risks and uncertainties for the
remaining six months of the financial year.
-- DTR 4.2.8: Details of related party transactions that have
taken place in the first six months of the current financial year
and that have materially affected the financial position or
performance of the enterprise during that period. Together with any
changes in the related party transactions described in the last
annual report that could have a material effect on the enterprise
in the first six months of the current financial year.
Going Concern
The directors are pleased to report that the Group continues to
meet its debt obligations and expects to operate comfortably within
its available borrowing facilities. The Group's cash on hand at 30
November 2022 is negative GBP2.4m. We have carried out a review of
our cash requirements for the next 12 months. Scenarios modelled
included the removal of the Group's largest customer and increases
of 20% in costs of raw materials or overheads. These models show
that even without management tackling current overhead levels or
increasing prices to customers, the Group would not fully utilise
available working capital resources over the next 12 months. The
directors have therefore formed a judgement, at the time of
approving the financial statements, that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future being at least
twelve months from the date of this report. For this reason, the
directors continue to adopt the going concern basis in preparing
the financial statements.
By order of the Board
Nicholas O'Shea
Group Company Secretary and Director 30 November 2022
Principal risks and uncertainties
The Board regularly monitors exposure to key risks, such as
those related to production efficiencies, cash position and
competitive position relating to sales. It has also taken account
of the economic situation over the past 6 months, and the impact
that has had on costs and consumer purchases.
It also monitors those risks not directly or specifically
financial, but capable of having a major impact on the business's
financial performance if there is any failure, such as product
contamination and manufacture outside specification, maintenance of
satisfactory levels of customer and consumer service, accident
ratios, failure to meet environmental protection standards or any
of the areas of regulation mentioned above.
The principal risks and uncertainties and their associated
mitigating and monitoring controls which may affect the Group's
performance in the next six months are consistent with those
detailed in the Annual Report and Financial Statements 2022. The
main risk facing the Group relates to the inflationary pressures
and weak economic environment. These are covered in detail in the
Chairman's statement.
Creightons plc
Unaudited interim financial report
for the six months ended 30 September 2022
Consolidated income statement - unaudited
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2022
2022 2021
Note GBP000 GBP000 GBP000
----- ---------------------- -------------------- ------------------
Revenue 29,676 30,005 61,157
----- ---------------------- -------------------- ------------------
Cost of sales (17,686) (17,201) (35,001)
----- ---------------------- -------------------- ------------------
Gross profit 11,990 12,804 26,156
----- ---------------------- -------------------- ------------------
Distribution costs (1,951) (1,662) (3,535)
----- ---------------------- -------------------- ------------------
Administrative expenses (9,758) (8,547) (18,256)
----- ---------------------- -------------------- ------------------
Operating profit 281 2,595 4,365
----- ---------------------- -------------------- ------------------
Exceptional items 9 (463) (221) (602)
----- ---------------------- -------------------- ------------------
Finance costs 6 (177) (108) (308)
----- ---------------------- -------------------- ------------------
(Loss) / Profit before
tax (359) 2,266 3,455
----- ---------------------- -------------------- ------------------
Taxation 4 (26) (278) (345)
----- ---------------------- -------------------- ------------------
(Loss) / Profit for the
period from operations
attributable to the equity
shareholders of the parent
Company (385) 1,988 3,110
----------------------------- ----- ---------------------- -------------------- ------------------
Dividends
Note Six months Six months Year ended
ended 30 September ended 30 31 March
2022 September 2022
2021
(Unaudited) (Unaudited) (Audited)
Paid in year (GBP000) - - 428
--------------------- -------------- ------------
Paid in year (pence per
share) - - 0.65p
--------------------- -------------- ------------
Proposed (GBP000) - 98 -
--------------------- -------------- ------------
Proposed (pence per share) - 0.15p -
--------------------- -------------- ------------
Earnings per share
Note Six months Six months Year ended
ended 30 September ended 30 September 31 March
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
Basic 3 (0.55)p 3.05p 4.62p
------ -------------------- -------------------- ------------
Diluted (0.48)p 2.61p 3.98p
------ -------------------- -------------------- ------------
Consolidated statement of comprehensive income - Unaudited
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2022
2022 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---- -------------- -------------- ------------
(Loss) / Profit for the period (385) 1,988 3,110
-------------- -------------- ------------
Items that may be subsequently
reclassified to profit and
loss:
---- -------------- -------------- ------------
Exchange differences on translating
foreign operations (68) (39) (7)
-------------- -------------- ------------
Other comprehensive income
for the period (68) (39) (7)
-------------- -------------- ------------
Total comprehensive income
for the period attributable
to the equity shareholders
of the parent (453) 1,949 3,103
------------------------------------------- -------------- -------------- ------------
Consolidated balance sheet - unaudited
30 September 30 September 31 March
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
Note GBP000 GBP000 GBP000
----- ------------------- -------------- -------------------
Non-current assets
----- ------------------- -------------- -------------------
Goodwill 2,853 331 2,853
----- ------------------- -------------- -------------------
Other intangible assets 10,883 10,951 10,867
----- ------------------- -------------- -------------------
Property, plant and equipment 6,165 6,012 6,065
----- ------------------- -------------- -------------------
Right-of-use assets 1,107 977 1,120
----- ------------------- -------------- -------------------
Deferred tax asset - 503 -
----- -------------- -------------------
21,008 18,774 20,905
----- ------------------- -------------- -------------------
Current assets
----- ------------------- -------------- -------------------
Inventories 12,802 13,178 12,479
----- ------------------- -------------- -------------------
Trade and other receivables 14,518 15,608 13,624
----- ------------------- -------------- -------------------
Cash and cash equivalents 765 1,013 840
----- ------------------- -------------- -------------------
28,085 29,799 26,943
----- ------------------- -------------- -------------------
Total assets 49,093 48,573 47,848
----- ------------------- -------------- -------------------
Current liabilities
----- ------------------- -------------- -------------------
Trade and other payables 11,308 12,192 10,127
----- ------------------- -------------- -------------------
Corporation tax payable - 200 -
----- ------------------- -------------- -------------------
Lease liabilities 301 249 303
----- ------------------- -------------- -------------------
Borrowings 5,136 3,669 2,663
----- ------------------- -------------- -------------------
Deferred and contingent consideration - 1,628 1,187
----- ------------------- -------------- -------------------
16,745 17,938 14,280
----- ------------------- -------------- -------------------
Net current assets 11,340 11,861 12,663
----- ------------------- -------------- -------------------
Non-current liabilities
----- ------------------- -------------- -------------------
Deferred tax liability 3,006 - 2,640
----- ------------------- -------------- -------------------
Lease liabilities 838 777 8 64
----- ------------------- -------------- -------------------
Borrowings 3,900 4,827 4,386
----- ------------------- -------------- -------------------
7,744 5,604 7,890
----- ------------------- -------------- -------------------
Total liabilities 24,489 23,542 22,170
----- ------------------- -------------- -------------------
Net assets 24,604 25,031 25,678
----- ------------------- -------------- -------------------
Equity
----- ------------------- -------------- -------------------
Share capital 700 675 697
----- ------------------- -------------- -------------------
Share premium account 4,498 3,886 4,427
----- ------------------- -------------- -------------------
Treasury shares 8 (576) - -
----- ------------------- -------------- -------------------
Other reserves (211) 25 (211)
----- ------------------- -------------- -------------------
Translation reserve (45) (9) 23
----- ------------------- -------------- -------------------
Retained earnings 20,238 20,454 20,742
----- ------------------- -------------- -------------------
Total equity attributable
to the equity shareholders
of the parent Company 24,604 25,031 25,678
--------------------------------------- ----- ------------------- -------------- -------------------
Statement of changes in shareholders' equity - unaudited
Share Share Treasury Other Translation Retained Total
capital premium shares reserves reserve
account
------------------------------------ --------- --------- --------- ---------- ------------
earnings equity
------------------------------------ --------- --------- --------- ---------- ------------ --------- -------
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------- --------- --------- ---------- ------------ --------- -------
At 1 April 2021 648 1,410 - 25 30 17,973 20,086
--------- --------- --------- ---------- ------------ --------- -------
Comprehensive income for
the period
--------- --------- --------- ---------- ------------ --------- -------
Profit for the six-month
period - - - - - 1,988 1,988
--------- --------- --------- ---------- ------------ --------- -------
Exchange differences on
translation of foreign operations - - - - (39) - (39)
--------- --------- --------- ---------- ------------ --------- -------
Total comprehensive income
for the six months ended
30 September 2021 - - - - (39) 1,988 1,949
--------- --------- --------- ---------- ------------ --------- -------
Contributions by and distributions
to owners
--------- --------- --------- ---------- ------------ --------- -------
Shares issued on acquisitions 27 2,476 - - - - 2,503
--------- --------- --------- ---------- ------------ --------- -------
Share-based payment charge - - - - - 165 165
--------- --------- --------- ---------- ------------ --------- -------
Deferred tax through Equity - - - - - 328 328
--------- --------- --------- ---------- ------------ --------- -------
Total contributions by
and distributions to owners 27 2,476 - - - 493 2,996
--------- --------- --------- ---------- ------------ --------- -------
At 30 September 2021 675 3,886 - 25 (9) 20,454 25,031
------------------------------------ --------- --------- --------- ---------- ------------ --------- -------
Comprehensive income for
the period
--------- --------- --------- ---------- ------------ --------- -------
Profit for the six-month
period - - - - - 1,122 1,122
--------- --------- --------- ---------- ------------ --------- -------
Exchange differences on
translation of foreign operations - - - - 32 - 32
--------- --------- --------- ---------- ------------ --------- -------
Total comprehensive income
for the six months ended
31 March 2022 - - - - 32 1,122 1,154
--------- --------- --------- ---------- ------------ --------- -------
Contributions by and distributions
to owners
--------- --------- --------- ---------- ------------ --------- -------
Exercise of options 22 541 - - - - 563
--------- --------- --------- ---------- ------------ --------- -------
Purchase of own shares by
EBT - - - (236) - - (236)
--------- --------- --------- ---------- ------------ --------- -------
Share-based payment charge - - - - - 165 165
--------- --------- --------- ---------- ------------ --------- -------
Deferred tax through Equity - - - - - (571) (571)
--------- --------- --------- ---------- ------------ --------- -------
Dividends - - - - - (428) (428)
--------- --------- --------- ---------- ------------ --------- -------
Total contributions by
and distributions to owners 22 541 - (236) - (834) (507)
--------- --------- --------- ---------- ------------ --------- -------
At 31 March 2022 697 4,427 - (211) 23 20,742 25,678
--------- --------- --------- ---------- ------------ --------- -------
Comprehensive income for
the period
--------- --------- --------- ---------- ------------ --------- -------
Profit for the six-month
period - - - - - (385) (385)
--------- --------- --------- ---------- ------------ --------- -------
Exchange differences on
translation of foreign operations - - - - (68) - (68)
--------- --------- --------- ---------- ------------ --------- -------
Total comprehensive income
for the six months ended
30 September 2022 - - - - (68) (385) (453)
--------- --------- --------- ---------- ------------ --------- -------
Contributions by and distributions
to owners
--------- --------- --------- ---------- ------------ --------- -------
Exercise of options 3 71 - - - - 74
--------- --------- --------- ---------- ------------ --------- -------
Purchase of own shares - - (576) - - (576)
--------- --------- --------- ---------- ------------ --------- -------
Share-based payment charge - - - - - 179 179
--------- --------- --------- ---------- ------------ --------- -------
Deferred tax through Equity - - - - - (298) (298)
--------- --------- --------- ---------- ------------ --------- -------
Total contributions by
and distributions to owners 3 71 (576) - - (119) (621)
--------- --------- --------- ---------- ------------ --------- -------
At 30 September 2022 700 4,498 (576) (211) (45) 20,238 24,604
------------------------------------ --------- --------- --------- ---------- ------------ --------- -------
Consolidated cash flow statement - unaudited
Note Six months Six months Year ended
ended 30 ended 30 31 March
September September 2022
2022 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
------- -------------- -------------- ------------
Profit from operations 281 2,595 4,365
------- -------------- -------------- ------------
Adjustments for:
------- -------------- -------------- ------------
Depreciation on property, plant
and equipment 505 432 888
------- -------------- -------------- ------------
Depreciation on right of use assets 149 113 256
------- -------------- -------------- ------------
Amortisation of intangible assets 150 209 435
------- -------------- -------------- ------------
(Profit)/Loss on disposal of property,
plant and equipment 8 10 (10)
------- -------------- -------------- ------------
Share based payment charge 179 165 330
------- -------------- -------------- ------------
Redundancy payments (150) - -
------- -------------- -------------- ------------
1,122 3,524 6,264
------- -------------- -------------- ------------
(Increase)/decrease in inventories (323) (3,211) (2,515)
------- -------------- -------------- ------------
(Increase) /decrease in trade and
other receivables (779) (3,931) (1,820)
------- -------------- -------------- ------------
Increase /(decrease) in trade and
other payables 1,182 1,894 59
------- -------------- -------------- ------------
Taxation paid (70) (291) (575)
------- -------------- -------------- ------------
Net cash from operating activities 1,132 (2,015) 1,413
------- -------------- -------------- ------------
Investing activities
------- -------------- -------------- ------------
Purchase of property, plant and
equipment (605) (608) (1,106)
------- -------------- -------------- ------------
Purchase of right of use assets (171) - (286)
---------------------------------------- -------------- -------------- ------------
Proceeds from sale and lease back
(IAS 17) - - 264
------- -------------- -------------- ------------
Purchase of intangible assets (166) (167) (338)
------- -------------- -------------- ------------
Acquisition of Brodie & Stone - (2,807) (3,507)
------- -------------- -------------- ------------
Acquisition of Emma Hardie 7 (1,424) (2,775) (2,775)
------- -------------- -------------- ------------
Exceptional costs in relation to
acquisitions - (221) (343)
------- -------------- -------------- ------------
Net cash used in investing activities (2,366) (6,578) (8,091)
------- -------------- -------------- ------------
Financing activities
------- -------------- -------------- ------------
Proceeds on issue of shares 73 - 564
------- -------------- -------------- ------------
Principal paid on lease liabilities (117) (116) (240)
------- -------------- -------------- ------------
Interest on leases liabilities (53) (62) (117)
------- -------------- -------------- ------------
Interest paid on mortgage loan (41) (44) (83)
------- -------------- -------------- ------------
Interest paid on overdrafts and
loans (83) (2) (108)
------- -------------- -------------- ------------
(Decrease)/increase in invoice
financing facilities 2,845 1,344 1,267
------- -------------- -------------- ------------
Increase/(decrease) of overdraft (405) 948 495
------- -------------- -------------- ------------
Draw down of loan facility - 3,000 3,000
------- -------------- -------------- ------------
Repayment on term loan (332) - (314)
------- -------------- -------------- ------------
Repayment on mortgage loan facility (84) (82) (169)
------- -------------- -------------- ------------
Repayment of debt - Emma Hardie - (1,457) (2,201)
------- -------------- -------------- ------------
Repayment of debt - Brodie & Stone - (489) (463)
------- -------------- -------------- ------------
Dividends paid to owners of the
parent - - (428)
------- -------------- -------------- ------------
Purchase of own shares via EBT - - (236)
------- -------------- -------------- ------------
Purchase of shares - EH buy back 8 (576) - -
------- -------------- -------------- ------------
Net cash used in financing activities 1,227 3,040 967
------- -------------- -------------- ------------
Net decrease in cash and cash
equivalents (7) (5,553) (5,711)
------- -------------- -------------- ------------
Cash and cash equivalents at start
of period 840 6,558 6,558
------- -------------- -------------- ------------
Effect of foreign exchange rate
changes (68) 8 (7)
------- -------------- -------------- ------------
Cash and cash equivalents at end
of period 765 1,013 840
------- -------------- -------------- ------------
Notes to the unaudited interim financial report
1. Basis of preparation
The interim financial statements for the six months ended 30
September 2021 and 30 September 2022 and for the twelve months
ended 31 March 2022 do not constitute statutory accounts for the
purposes of Section 434 of the Companies Act 2006. The Annual
Report and Financial Statements for the year ended 31 March 2022
have been filed with the Registrar of Companies. The Independent
Auditors' Report on the Annual Report and Financial Statements for
the year ended 31 March 2022 was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under sections 498(2) or 498(3) of the Companies Act
2006. The 30 September 2022 statements were approved by the Board
of Directors on 30 November 2022. This unaudited interim report has
not been audited or reviewed by auditors pursuant to the Financial
Reporting Council guidance on Review of Interim Financial
Information.
The condensed financial statements in this Interim Report have
been prepared in accordance with the requirements of IAS 34
'Interim Financial Reporting' as endorsed by the UK.
As required by the Disclosure and Transparency Rules of the UK's
Financial Conduct Authority, the condensed set of financial
statements has been prepared by applying the accounting policies
and presentation that were applied in the preparation on the
Company's published consolidated financial statements for the year
ended 31 March 2022, which were prepared in accordance with
International Financial Reporting Standards as endorsed by the
UK.
The condensed interim financial statements for the six months
ended 30 September 2022 and the comparative figures for the six
months ended 30 September 2021 are unaudited. The figures for the
year ended 31 March 2022 have been extracted from the Annual Report
on which the Auditors issued an unqualified audit report and which
have been filed with the Registrar of Companies.
2. Significant accounting policies
Adoption of new and revised accounting standards
No new standards impacting on the Group have been adopted in its
financial statements for the year ended 31 March 2022 or the
interims ended 30 September 2022.
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided
not to adopt early. The Group does not expect any of the standards
issued by the IASB, but not yet effective, to have a material
impact on the Group.
3. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2022
2022 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
--- -------------- -------------- ------------
Earnings
--- -------------- -------------- ------------
Net profit attributable to
the equity holders of the
parent company (385) 1,988 3,110
-------------- -------------- ------------
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2022
2022 2021
(Unaudited) (Unaudited) (Audited)
Number Number Number
--- -------------- -------------- ------------
Number of shares
--- -------------- -------------- ------------
Weighted average number of
ordinary shares for the purposes
of basic earnings per share 69,832,186 65,196,505 67,372,553
---------------------------------------- -------------- -------------- ------------
Effect of dilutive potential
ordinary shares relating
to share options 9,862,002 10,915,679 10,681,836
-------------- -------------- ------------
Weighted average number of
ordinary shares for the purposes
of diluted earnings per share 79,694,188 76,112,184 78,054,389
-------------- -------------- ------------
Basic (0.55)p 3.05p 4.62p
-------- ------ ------
Diluted (0.48)p 2.61p 3.98p
-------- ------ ------
4. Taxation
Six months Six months Year ended
ended 30 ended 30 September 31 March
September 2021 2022
2022
(Unaudited) (Unaudited) (Audited)
---
GBP000 GBP000 GBP000
--- -------------- -------------------- ------------
Current tax (43) 162 100
-------------- -------------------- ------------
Deferred tax liability 69 116 245
-------------- -------------------- ------------
Total 26 278 345
-------------- -------------------- ------------
5. Notes to cash flow statement
Analysis of changes in net debt
6 months ended 30 September Overdraft Invoice Mortgage Loan Total
2022 Financing
GBP000 GBP000 GBP000 GBP000 GBP000
---------- ----------- --------- ------- -------
At 1 April 2022 495 1,267 2,642 2,645 7,049
---------- ----------- --------- ------- -------
Cash flows (405) 2,762 (127) (402) 1,828
---------- ----------- --------- ------- -------
Interest accruing - 83 41 35 159
---------- ----------- --------- ------- -------
At 30 September 2022 90 4,112 2,556 2,278 9,036
----------------------------- ---------- ----------- --------- ------- -------
6 months ended 30 September Overdraft Invoice Mortgage Loan Total
2021 Financing
GBP000 GBP000 GBP000 GBP000 GBP000
---------- ----------- --------- ------- -------
At 1 April 2021 - - 2,812 - 2,812
---------- ----------- --------- ------- -------
Cash flows 948 1,818 (126) 3,000 5,640
---------- ----------- --------- ------- -------
Interest accruing - - 44 - 44
---------- ----------- --------- ------- -------
At 30 September 2021 948 1,818 2,730 3,000 8,496
----------------------------- ---------- ----------- --------- ------- -------
12 months ended 31 Overdraft Invoice Mortgage Loan Total
March 2022 Financing
GBP000 GBP000 GBP000 GBP000
---------- ----------- --------- ------- -------
At 1 April 2021 - - 2,812 - 2,812
---------- ----------- --------- ------- -------
Cash flows 495 1,267 (253) 2,603 4,112
---------- ----------- --------- ------- -------
Interest accruing - - 83 42 125
---------- ----------- --------- ------- -------
At 31 March 2022 495 1,267 2,642 2,645 7,049
----------------------------- ---------- ----------- --------- ------- -------
6. Finance costs
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2022
2022 2021
(Unaudited) (Unaudited) (Audited)
GBP000 GBP000 GBP000
---- -------------- -------------- ------------
Interest on bank overdrafts
and loans 83 2 108
-------------- -------------- ------------
Interest on mortgage 41 44 83
-------------- -------------- ------------
Interest on lease liabilities 53 62 117
-------------- -------------- ------------
Total 177 108 308
-------------- -------------- ------------
7. Final consideration paid to the Sellers under the SPA of Emma Hardie Limited:
Further to the sale and purchase agreement ("SPA") relating to
the acquisition of the entire share capital of Emma Hardie Limited
as announced on 28 July 2021, the Group has made the final payment
due to be made under the SPA to the sellers and the Company and
also entered a settlement and share buyback agreement with the
sellers in respect of certain matters related to the
acquisition.
The final payment amounted to GBP1,424,000. This consisted of
two components. The first of which pertained to the SPA agreement.
Under the SPA, if on the date of twelve months from completion the
volume weighted average middle market quoted price of an Ordinary
Share for the last 5 Business days prior to that date (as derived
from the Daily Official List of London Stock Exchange Plc) were to
be less than GBP1.25, then an additional amount would be payable to
the sellers in cash equal to such difference in price multiplied by
the number of Consideration Shares issued. This equated to
GBP1,333,664. The second component was in relation to the
adjustment payment and the deferred payment amounting in aggregate
to GBP90,336. No further amount is due to be paid by the Group
under the SPA.
8. Share Buy Back of the Consideration Shares
Separately, it has been agreed with the two sellers that the
Company buy back 800,000 Consideration Shares from each of them for
a consideration of GBP288,000, being an aggregate consideration of
GBP576,000 (together the "Buyback"). The consideration is based on
the price of 36p per ordinary share being the on-market price at
the time of the transaction. The Buyback took place on 26 September
2022.
The Company intends the total of 1,600,000 re-purchased shares
to be held as treasury shares.
9. Exceptional items
Redundancy costs from the cessation of the second shift
To counteract the challenging market conditions borne by
increase in supply chain costs t he business has undertaken a
significant cost reduction improvement with the objective of
improving profitability. This includes moving to a single shift
operation in Peterborough which has been made possible by the
efficiency-driven investment in the previous year. This
unfortunately did result in redundancies which cost the business
c.GBP0.15m.
Finalisation of Emma Hardie Limited SPA liability
As of the 31 March 2022 GBP1,027,500 had been accrued in
anticipation of the final consideration paid to the Sellers under
the SPA of Emma Hardie Limited. A further GBP84,000 had been
accrued in relation to the adjustment payment and the deferred
consideration as part of the SPA of Emma Hardie Limited. As
discussed in note 7 the actual payment amounted to GBP1,424,000.
The shortfall in the amount provided at the end of 31 March 2022
had a P&L impact of GBP312,500.
10. Related party transactions
The related party transactions that occurred in the six months
ended 30 September 2022 are not materially different in size or
nature to those reported in the Company's Annual Report for the
year ended 31 March 2022.
11. Availability of Interim Report
The Interim Report is being made available to shareholders on
the Company website www.creightonsplc.com. Further copies can be
obtained from the Company's Registered Office, 1210 Lincoln Road,
Peterborough, PE4 6ND.
For more information:
Nicholas O'Shea, Director, Creightons plc 01733 281000
Roland Cornish, Beaumont Cornish Limited 0207 628 3396
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END
IR BMBPTMTTJBRT
(END) Dow Jones Newswires
December 01, 2022 02:00 ET (07:00 GMT)
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