TIDMFIF
RNS Number : 2250M
Finsbury Food Group PLC
20 September 2021
Date: 20 September 2021
On behalf Finsbury Food Group Plc ('Finsbury', 'the Company'
of: or 'the Group')
Embargoed until: 0700hrs
Finsbury Food Group Plc
Preliminary Results
Finsbury Food Group Plc (AIM: FIF), a leading UK speciality
bakery manufacturer of cake, bread and morning goods for the retail
and foodservice channels, is pleased to announce its preliminary
results for the 52 weeks ended 26 June 2021.
Summary
The full year figures represent twelve month trading in the
pandemic environment compared to three months in the previous year.
It also embraces six months trading post Brexit. The year on year
growth across all metrics reflects how resilient the Group is and
how well it can adapt in an environment of uncertainty.
-- Group revenue up 2.3% to GBP313.3m.
-- Group EBITDA *(1) up 2.5% to GBP26.9m.
-- Profit before tax up 493% to GBP17.0m.
-- Adjusted Basic EPS*(2) (pence per share) 9.1p (2020: 7.9p).
-- Strong cash generation driving down net bank debt down from
GBP26.5m to GBP13.1m (excluding IFRS 16 debt), reducing leverage to
0.5 times annualised EBITDA of the Group (2020: 1.1 times).
-- The Group's Operating Brilliance Programme continues to drive
improvements in operational variances, with gross margin increasing
1.7% to 32.9%.
Strategic Highlights
-- Extremely positive second half performance with second half
revenues up 9.1% against the corresponding period in the prior
year.
-- Progressive improvement year on year with retail up +5.8% and
foodservice down 14.9% as it recovers from Covid impact
o The foodservice business continues to improve with second half
revenues up 4.6% against the comparative period in the prior
year.
-- Significant growth in overseas division up 13.4% against the prior year.
-- Investment in capital projects of GBP6.2m, including:
o A new frozen dough ball facility commissioned in Manchester;
and
o Additional 50% capacity in state of the art artisan bread
production equipment.
-- Further innovation in line with consumer trends with;
o Award-winning Free From and vegan cakes; and
o Launch of vegan doughnuts and a range of artisan gluten-free
breads.
-- Continued double-digit growth in artisan sourdough breads.
-- Product excellence illustrated by the winning of several Quality Food and Drink 'Q' Awards.
-- Continued investment in development, engagement and health and well-being of employees.
*(1) Profit is before significant non-recurring and other
items.
*(2) Adjusted EPS has been calculated using earnings excluding
the impact of amortisation of intangibles and significant
non-recurring and other items as shown on the face of the Statement
of Comprehensive Income.
Commenting on the results, John Duffy, Chief Executive of
Finsbury Food Group Plc, said:
"It was incredibly pleasing to deliver such a robust financial
performance with year-on-year revenue growth and a total sales
figure almost at pre-pandemic levels, despite having to navigate
such challenging circumstances over the period. We have continued
to introduce new initiatives, in line with our Operating Brilliance
Programme, to enable the Group to operate as a single, efficient
organisation capable of scale execution.
I would like to thank all our people across the Group for their
continued hard work, determination and commitment through what has
been a testing time for many of them and their families. Without
the determination of our committed workforce, we wouldn't have been
able to play a part in keeping food shelves stocked in the
territories we serve and the whole team should be extremely proud
of their contributions.
Whilst we are likely to face persistent challenges around
inflation and skilled labour and driver shortages, our long-term
growth ambitions remain unchanged. We are committed to making
Finsbury an even more efficient and joined-up business, focused on
driving synergies and scale benefits across the Group."
This announcement contains inside information.
For further information:
Finsbury Food Group
John Duffy (Chief
Executive)
Steve Boyd (Finance
Director) www.finsburyfoods.co.uk 029 20 357 500
Panmure Gordon (UK)
Limited
Oliver Cardigan (Corporate
Finance)
Atholl Tweedie
Erik Anderson (Corporate
Broking) 020 7886 2500
Alma PR
Sam Modlin
David Ison
Hilary Buchanan
Molly Gretton finsbury@almapr.co.uk 020 3405 0205
Notes to Editors:
-- Finsbury Food Group Plc (AIM: FIF) is a leading UK
manufacturer of cake and bread bakery goods, supplying a broad
range of blue-chip customers within both the grocery retail and
'out-of-home eating' foodservice sectors including major multiples
and leading foodservice providers.
-- The Company is one of the largest speciality bakery groups in
the UK and, with its overseas division, has sales in the financial
year ending 26 June 2021 exceeding GBP313 million.
-- The Company's bakery product range is comprehensive and includes:
-- Large premium and celebration cakes.
-- Small snacking cake formats such as cake slices and bites.
-- Artisan, healthy lifestyle and organic breads through to
rolls, muffins (sweet and savoury) and morning goods, all of which
are available both fresh and frozen dependent on customer channel
requirements.
-- Gluten free bread, morning goods and cake ranges.
-- The Company is one of the largest ambient cake manufacturers
in the UK, a market valued at over GBP978 million (source: IRI 52
w/e 19th June 2021). The retail bread and morning goods market has
a value of GBP5.1 billion (source: Kantar Worldpanel 52 w/e 18th
April 2021). The retail Free From cake market is valued at GBP52.0
million (source: Kantar Worldpanel 52 w/e 16th May 2021). The
retail Free From bread and morning goods market is valued at
GBP144.0 million (source: Kantar Worldpanel 52 w/e 18th April
2021).
-- The Company comprises a core UK bakery division and an overseas division:
-- The UK Bakery division has manufacturing sites in Cardiff,
East Kilbride, Hamilton, Salisbury, Sheffield, Manchester and
Pontypool.
-- The overseas division comprise of the Company's 50% owned
company, Lightbody Stretz Ltd, which supplies and distributes the
Group's UK-manufactured products, primarily to Europe, and the
Company's manufacturing facilities in Rybarzowice and Zywiec in
Poland.
Adjusted EBITDA and Profit Reconciliation of Statutory to
Adjusted
In order to understand the business performance, adjusted
measures for the Group are presented which exclude the impact of
significant non-recurring items and other items to present adjusted
EBITDA, operating profit and profit before tax. In the opinion of
the Board the adjusted measures allow shareholders to gain a
clearer understanding of the trading performance of the Group. The
analysis below shows the movement from adjusted to statutory
measures, the figures are for the 52 weeks ended 26 June 2021 and
52 weeks ended 27 June 2020:
Adjusted EBITDA 2021 2020
GBP000 GBP000
---------------------------------------------------------- -------- ---------
Adjusted EBITDA (PY: adjusted EBITDA including IFRS
16 impact) 26,904 26,248
Significant non-recurring items - (see Note 4) 958 (10,331)
Difference between Defined Benefit Pension Scheme
charges and cash cost 473 200
Movement in the fair value of foreign exchange contracts 696 (73)
---------------------------------------------------------- -------- ---------
Adjustments, significant non-recurring and other
items 2,127 (10,204)
---------------------------------------------------------- -------- ---------
EBITDA 29,031 16,044
---------------------------------------------------------- -------- ---------
Adjusted Operating Profit 2021 2020
GBP000 GBP000
---------------------------------------------------------- -------- -----------
Adjusted operating profit (PY: adjusted operating
profit including IFRS 16 impact) 16,100 14,939
Significant non-recurring items - (see Note 4) 958 (10,331)
Difference between Defined Benefit Pension Scheme
charges and cash cost 473 200
Movement in the fair value of foreign exchange contracts 696 (73)
---------------------------------------------------------- -------- -----------
Adjustments, significant non-recurring and other
items 2,127 (10,204)
---------------------------------------------------------- -------- -----------
Operating profit 18,227 4,735
---------------------------------------------------------- -------- -----------
Adjusted Profit before Tax 2021 2020
GBP000 GBP000
---------------------------------------------------------- -------- ---------
Adjusted profit before tax (PY: adjusted profit before
tax including IFRS 16 impact) 15,126 13,728
Significant non-recurring items - (see Note 4) 958 (10,331)
Difference between Defined Benefit Pension scheme
charges and cash cost 249 (56)
Movement in the fair value of foreign exchange contracts 696 (73)
Discounting of deferred consideration (105) (14)
Movement in the fair value of interest rate swaps 89 (386)
---------------------------------------------------------- -------- ---------
Adjustments, significant non-recurring and other
items 1,887 (10,860)
---------------------------------------------------------- -------- ---------
Profit before tax 17,013 2,868
---------------------------------------------------------- -------- ---------
Adjusted EBITDA, operating profit and profit before tax exclude
significant and non-recurring and other items as shown in the
tables. The adjusted operating profit has been given as, in the
opinion of the Board, this will allow shareholders to gain a
clearer understanding of the trading performance of the Group.
Group Performance Statutory Measures
Measures
Group Revenue *(2)
GBP313.3m up 2.3%
Adjusted EBITDA(*1) EBITDA
GBP26.9m up 2.5% GBP29.0m
Adjusted Operating Operating Profit
Profit(*1) GBP18.2m
GBP16.1m up 7.8%
Adjusted Profit(*1) Profit before Tax
before Tax GBP17.0m
GBP15.1m up 10.2%
Adjusted Basic EPS Basic EPS
9.1p up 15.2% 9.8p
Capital Investment *(2)
GBP6.2m up 31.6%
Net Debt (excl leases) Net Debt (incl leases)
GBP13.1m down 50.4% GBP25.4m
*(1) The Group uses Alternative Performance Measures (APMs)
which are non-IFRS measures to monitor performance of its
operations and of the Group as a whole. These APMs along with their
definitions are provided in the Adjusted EBITDA, Operating Profit
and Profit Before Tax tables on the previous page and the tables in
the Financial Review Section. APMs are disclosed as, in the opinion
of the Board, this will allow shareholders to gain a clearer
understanding of the trading performance of the Group.
Adjusted EPS has been calculated using profit, excluding
amortisation of intangibles, significant non-recurring and other
items as shown in the tables above net of associated taxation. In
the opinion of the Board, the adjustments made will allow
shareholders to gain a clearer understanding of the trading
performance of the Group.
*(2) Measures that do not vary are shown in the first column
only.
Chairman's Statement
The robust performance delivered by the Group for the full year
ended 26 June 2021 is testament to the resilience of our business,
the strength of the management team, the efforts of the whole
Finsbury team and our well-defined strategy.
The whole of this financial year has been affected by the
external management of the pandemic. This has created challenges
both within our business and our end markets. Our ongoing priority
over the period has been to ensure the safety of our employees
whilst maintaining excellent continuity of supply to our customers
and consumers. Without the hard work and dedication of our teams,
in incredibly challenging circumstances, we would not have been
able to deliver the performance we have achieved.
Pleasingly, the Group has been able to adapt, develop and
strengthen over the course of the year, resulting in year-on-year
revenue growth and a total sales figure almost at pre-pandemic
levels.
Our focus on strategic execution has not wavered and we have
continued to make progress against our objectives to ensure that
our businesses operate as one cohesive unit with a greater
uniformity of processes and procedures and better
communication.
A Resilient Performance
The resilience and determination of the business has ensured we
have delivered a very encouraging performance, despite the
continued impact of the pandemic. The full year figures reflect a
period completely impacted by Covid-19 and compares with a prior
year period which included a six-month period of strong growth,
which pre-dated the onset of the pandemic.
Group revenue was GBP313.3 million (2020: GBP306.3 million),
adjusted EBITDA increased by 2.5% to GBP26.9 million (2020: GBP26.2
million), adjusted profit before tax increased by 10.2% to GBP15.1
million (2020: GBP13.7 million) and the Group delivered EPS of
9.8p. There have been good improvements in cost and cash
performance with a significant strengthening of the Group's net
bank debt position by year end to GBP13.1 million, a decrease of
50.4%.
Retail sales have performed well and grown year on year which
largely compensated for the shortfall in foodservice sales which
represented 20.0% of the Group's total revenue, pre-Covid. Although
foodservice was slower to recover than originally anticipated as a
result of the timing of restrictions, the majority of the shortfall
was recovered in the course of year. This resulted in revenue
growing versus last year but still slightly below pre-Covid
turnover.
The overall business performance has been enhanced by the
Group's successful Operating Brilliance Programme (see below) which
continued despite Covid restrictions and has delivered improved
line efficiencies and lower waste throughout the Group's
bakeries.
Dividend
Given the uncertainty at the outset of the pandemic the Board
took the decision to withdraw the interim dividend and also decided
not to propose a final dividend in the context of the continued
uncertainty surrounding the pandemic and Brexit. The Board is
recommending a full year dividend of 2.4 pence per share for the
financial year ending 26 June 2021.
Continued Focus on Strategic Execution
Over the past few years Finsbury has been focused on driving
operational excellence and achieving 'Baking Brilliance', guided by
our Operating Principles. The Finsbury Operating Principles are a
set of practical commitments and guidelines for how we run our
business. They bring our strategy to life in our day-to-day
work.
Indeed, our Process Blueprint is now fully integrated in all
aspects of the business and we are seeing excellent results
throughout, improving our efficiency and effectiveness and
importantly also our sustainability.
We have also throughout the year continued to strengthen and
develop our Group IT systems in areas such as supply chain
optimisation, product lifecycle management and sales operations and
planning.
As a Board, we remain committed to reviewing and evolving the
areas of strategic focus to ensure that the Group is always looking
to improve and is well positioned to capitalise on the
opportunities that present themselves. The process we adopt has
developed well over the years, involving more key personnel and has
delivered this year the most rigorous and complete outcome, by
far.
Our People
It has been an extraordinary year for the people of Finsbury
with daily challenges for everyone, both professionally and
personally. The strength of our people and culture has continued to
shine through and I am proud to be part of such a hardworking and
resolute group.
Due to the nature of our business, the majority of our workers
are unable to work from home and so have had to balance their roles
within our Group with their roles at home. I would like to thank
them for the individual sacrifices that they have made and the
dedication that they have shown.
I would also like to take this opportunity to say a huge thank
you to our executive team, customers, partners, suppliers and
shareholders for their continued enthusiasm and dedication and also
to the Board for their support and counsel. I look forward to
achieving further success together in the future.
A Responsible Business
Acting as a responsible business is at the core of the Group's
strategy. Finsbury aims to always operate in an ethical and
sustainable way and to help our people play a positive role in the
communities where we operate.
We are committed to ensuring our people enjoy a safe working
environment and we invest in their development. We all take
personal pride in the business's success and remain strong
advocates of the business and products.
Being a responsible business also means optimising our use of
resources, so we do all we can to reduce waste in our bakeries and
throughout our supply chain, minimising our impact on the
environment.
Outlook
Whilst we navigate through the consequences of the pandemic's
impact on the economy, such as inflation and skilled labour and
driver shortages, we remain confident about the Group's continued
growth prospects. We have demonstrated the strength of our team and
our ability to adapt and evolve in response to changing
circumstances. As a result, we are emerging from the shadow of the
pandemic a stronger and more united business, focused on our goal
of becoming the leading speciality bakery group.
Peter Baker
Non-Executive
Chairman
17 September 2021
Chief Executive's Report
The period under review has been incredibly challenging with
market conditions and channel dynamics being entirely shaped by the
ongoing Covid-19 pandemic. The overall demand for food and drink
(both in home and out of home) has fluctuated significantly shaped
by national, regional and local lockdowns and restrictions.
However, it is testament to the hard work and commitment of our
teams that we have been able to successfully manage and adapt the
business, resulting in year-on-year revenue growth and a total
sales figure almost at pre-pandemic levels.
Robust Performance Despite a Difficult Trading Environment
The Group delivered a strong second half performance, with H2
revenues up 9.1% against the corresponding period in the prior year
despite further Covid unlocking delays. This strong performance has
resulted in revenues for the year increasing 2.3% to GBP313.3
million (2020: GBP306.3 million), which is almost at pre-pandemic
levels (2019: GBP315.3 million).
Revenue in the Group's core division, UK bakery, increased 0.8%
for the full year, driven by a strong second half with H2 revenues
up 6.8% versus the prior year. The recovery of the Group's
foodservice business has continued, although slower than expected
due to ongoing Covid restrictions.
Overseas revenues for the full year were up 13.4% against the
prior year. This was driven by an extremely positive performance in
the second half versus the corresponding period in the prior year,
which was negatively impacted by earlier implementations of Covid
lockdowns across Europe.
The Group's Operating Brilliance Programme continued to drive
improvements in cost and cash performance with a significant
strengthening of the Group's net bank debt position by year end to
GBP13.1 million, a reduction of GBP8.4 million from 26 December
2020.
Developing an Offering for the Times
As we reflect on lockdown sales patterns and study demand
profiles as restrictions have eased, the data shows the pandemic
has mainly accelerated existing consumer trends rather than
triggered new ones. Pre-pandemic, online grocery shopping, for
example, had been growing in prevalence for some time, but no one
could have anticipated the widespread, almost overnight adoption by
large swathes of the country in response to stay at home guidance.
While the nation is returning to bricks and mortar stores, online
has undoubtedly taken a sizeable share of the market that is
unlikely to revert in the near future. In response to this, we have
been working with key retail partners to share our cake and
celebration cake strategy initiatives in order to ensure we are
aligned with their post pandemic online strategies.
Similarly, while demand across categories has ebbed and flowed
with restrictions in the period, momentum behind the consumer
trends we have seen develop in recent years - vegan, artisan and
wellness, for example - has continued to build, and we continue to
work with our partners and customers to create new and innovative
products in response to them.
In vegan, we now have several touchpoints in both cake and
bread, including a range of cakes and a brioche bun developed in
collaboration with plant-based food specialist brand BOSH! In
artisan, we continued to cement our position as a leader in the
segment, investing in state-of-the-art bread production equipment
and upping capacity by 50%.
We have also made investments to extend our Free From capability
within cake, especially the sharing cake market, and speciality
bread ranges with plans to grow further in Free From.
Wellness remains a major trend and we continue to take steps to
reduce salt and sugar to ensure all our products can be enjoyed as
part of a balanced diet. More than 98% of our products meet the
salt content targets of the FSA, and we continue to make good
progress against Public Health England's sugar reduction ambitions
with content down 12.4% on the previous year versus an 8.2%
reduction this time last year.
From a brand portfolio perspective, we continued to go from
strength to strength. In the period we were able to deepen our
relationships with existing partners such as Mars and Diageo, while
adding new ones such as TGI Fridays. The extension of our branded
portfolio further in to sharing cake has supported the
implementation of a robust strategy which is delivering significant
category share growth with key customer partners.
As part of our response to Covid, as well as mitigating the
various risks, we continue to explore ways to address some of the
emerging opportunities presented by the changing consumer landscape
such as more at home lunchtime eating occasions. This will see the
Group gradually step-up investment in specific areas of capacity
and product capability in the new financial year.
In Pursuit of Operational Excellence
In 2019 we rolled out six Group Operating Principles, a set of
practical building blocks that establish best practice and how we
want to consistently run our businesses. They are:
-- Operating Excellence - we continually invest in our bakeries
to improve our efficiency and customer satisfaction.
-- Sustainable Approach - we optimise our use of resources and
focus on reducing waste throughout our supply chain and in our
bakeries.
-- Quality and Innovations - our innovative, high-quality bakery
products reflect changing customer needs and anticipate key market
trends.
-- Cost Effectiveness - we maintain strict cost controls without
compromising quality, streamlining our processes from sourcing to
delivery.
-- Growth With Our Partners - through long-term relationships
with our customers and suppliers, and an understanding of their
needs, we can all enjoy profitable growth.
-- People Who Care - we invest in our people, who take personal
pride in their contribution to our success, and are strong
advocates of our business and products.
We are now at a more mature stage in the delivery of our
Operating Brilliance Programme and continue to accelerate the
development of initiatives to enable Finsbury to operate as a
single, efficient Group capable of scale execution, despite the
impacts of Covid. Combined, these initiatives are designed to
benefit the Group over the long term but we are already seeing
tangible benefits in areas such as factory efficiency and waste
reduction, which is having a positive impact on our gross
margin.
Building on the infrastructure investment made previously, we
have continued to strengthen our Group IT systems in areas such as
supply chain optimisation, product lifecycle management and sales
and operations planning. We are also on the verge of completing the
implementation phase of a new Group-wide computerised maintenance
management system, which will ensure that the equipment and
processes in all bakeries consistently operate to an
industry-recognised high standard.
Linked to this is our Process Blueprint project, designed to
establish, embed and optimise knowledge of all our processes while
encouraging collaboration and exchange of ideas. This is now fully
integrated and we are seeing excellent results from both a quality
and sustainability perspective.
While the Operating Brilliance Programme pre-dates the pandemic,
there is no doubt our experience of managing and adapting to the
challenges of the past 18 months has had a significant, positive
impact on our efforts to find better ways of working.
One example of this is the programme we have launched with a
third-party consultancy to maximise the efficiency of our workforce
and give our people the tools and training they need to realise
their potential. The vast majority of this has been carried out
remotely at a faster pace than we had originally anticipated and is
an approach we will continue to take as conditions normalise.
While we are pleased with the operational headway made in the
year against a challenging backdrop, there are several key
workstreams underway to identify and address additional areas for
improvement. With each period, Finsbury is becoming an ever-more
optimised organisation, and I look forward to reporting on further
progress on this front.
Bringing Our People Closer and Helping Them Succeed
I would like to take this opportunity to personally thank our
people across the Group for their continued hard work,
determination and commitment through what has been a challenging
time for many of them and their families. It is thanks to them we
have been able to play a part in keeping food shelves stocked in
the territories we serve and they should all be extremely proud of
their contributions.
Bringing our teams and people closer together has been a major
focus in recent periods and the past year has seen this process
accelerate considerably, thanks in large part to the sudden and
comprehensive shift to digital. One example of this is the
Group-wide health and safety exercise we have been conducting with
an external adviser. The exercise was centred around a series of
online focus groups, and subsequently we received responses to a
request for feedback from over two and a half thousand colleagues,
or more than 75% of the workforce. It is difficult to imagine this
level of engagement being possible - particularly not at this speed
and scale - without the convenience of the whole exercise taking
place remotely. In addition, further roll out of Facebook
Workplace, an online communication tool, to connect every member of
staff that works for the Group meant that as a management team we
were able to update on the process in real time via written and
video messages. Workplace has been an invaluable tool throughout
the pandemic, not just from a communication perspective but in
connecting colleagues and giving people a sense of shared purpose
and collaboration.
As we execute against our strategy and the business grows and
evolves, so should the roles and responsibilities of the Group
Executive Committee. To this end, we have grown the senior team in
the period, promoting from within where possible. Our leadership
development programmes have been strengthened, our graduate
recruitment programme continues to be successful, and our
apprenticeship programme, which is key to building a pipeline of
engineers, is growing in popularity. We have an abundance of talent
in the Group and are committed to continuing to develop colleagues
and giving those who excel the opportunity to move up through the
organisation.
From a wellness perspective, we launched our Health and
Wellbeing Strategy in the period, comprising three pillars: mental,
physical and financial health. Run by a combination of internal
champions and external partners, the programme offers a broad range
of support both to colleagues and their families. This is
supplemented by various Group-wide campaigns designed to encourage
our team members to stay active and healthy which have proven very
popular.
A Growing Focus on Sustainability
Finsbury has always prided itself on being a responsible
business that acts with integrity and care. Sustainability is in
our DNA, with metrics and goals embedded within all our business
strategies. Despite the operational challenges in the period
related to the pandemic, we continued to make great strides in the
period in becoming more energy efficient and reducing waste.
This time last year, we reported on how we were intending to
roll out asset energy monitoring across the Group following a
successful localised trial. I'm pleased to report this is now
complete, and plans are afoot to extend it to water use. We also
updated on our Group-wide transition to LED lighting. This has
risen from 60% to 70% coverage in the period, and is expected to
reach 100% by the end of the current financial year. We also
relocated our foodservice frozen storage operations to a new, more
energy-efficient facility in the period, achieving an estimated 65%
reduction in carbon emissions.
We continue to reduce plastic use and are making good progress
towards making all plastics 100% recyclable. Currently, 90% is
readily recyclable. At the same time, we remain a certified zero
landfill business. Over 80% of all our waste is recycled and we
have engaged several third parties to help us improve our output
further. I am also pleased to report that from May 2021, all of our
electricity is supplied from renewable sources.
We take a Group-wide approach based on our position as a major
and responsible employer in the food industry, and supplement it
with local initiatives chosen by our employees. In both ways, we
ensure we can have a positive impact on the communities where we
operate, which has always been an important part of how we do
business. At Group level, we support two charities, Grocery Aid and
FareShare, both of which are closely aligned to our industry. A
high proportion of our workforce live close to our bakeries,
putting them at the heart of our local communities. We therefore
ask each of our sites to choose a local charity partner for each
year, to help improve the lives and welfare of the communities we
work and live in.
Outlook
The environment in which we operate continues to face headwinds
in relation to raw material prices, inflation, and skilled labour
and driver shortages. Nevertheless, over the last 18 months the
Group has shown its resilience and its ability to adapt, develop
and strengthen no matter the circumstances.
Looking ahead, as we move into the new financial year, we will
maintain our focus on delivering organic growth, capitalising on
the momentum behind the consumer trends we have seen develop in
recent years such as vegan, artisan and wellness. We continue to
explore ways to address some of the emerging opportunities
presented by the changing consumer landscape such as more at home
lunchtime eating occasions. This will see the Group focus its
investment programme in specific areas of capacity and product
capability, as well as further productivity enhancing automation,
in the new financial year.
John Duffy
Chief Executive Officer
17 September 2021
Financial Review
Group revenue for the 52-week period to 26 June 2021 is GBP313.3
million, 2.3% higher than last year. The growth in revenue is the
result of a strong second half performance which saw Group revenues
grow 9.1%. The recovery of foodservice is driving the second half
year uplift although retail revenues remain positive. Sales from
our overseas division increased by 13.4% year-on-year driven by a
strong cake performance in the big French retailers. Group adjusted
operating profit at GBP16.1 million is up 7.8% on last year.
Despite the pandemic the Group has grown both revenue and operating
profit. Adjusted operating profit margins are 5.1% (2020: 4.9%), a
consequence of the success of our Operating Brilliance
Programme.
Other Significant and Non-Recurring Items
Significant non-recurring income of GBP1.0 million relates to
the release of provisions for onerous leases and factory closure
costs of GBP1.4 million less litigation and legal costs of (GBP0.4
million). Both items have been excluded from operating profit in
the table below to better reflect the ongoing trading position.
Dividend
Given the uncertainty at the outset of the pandemic, the Board
took the decision to withdraw the interim dividend and also decided
not to propose a final dividend in the context of the continued
uncertainty surrounding the pandemic and Brexit. The Board is
recommending a full year dividend of 2.4 pence per share for the
financial year ending 26 June 2021.
The tables below show what the Directors consider to be the
trading performance of the Group. The adjusted measures eliminate
the impact of significant and non-recurring items and other
accounting items, that are not deemed to reflect the continuing
performance of the Group.
52 week period ended 26 June 2021
Movement
in the
Fair value
Significant of interest As per
non-recurring Defined rate swaps/ Consolidated
items Benefit foreign Discounting Statement
Operating Note Pension exchange of deferred of Comprehensive
performance 4 Scheme contracts consideration Income
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Revenue 313,258 - - - - 313,258
Cost of sales (210,273) - - - - (210,273)
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Gross profit 102,985 - - - - 102,985
Other costs excluding
depreciation and
amortisation (76,081) 958 473 696 - (73,954)
EBITDA 26,904 958 473 696 - 29,031
Depreciation and
amortisation (10,804) - - - - (10,804)
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Operating profit 16,100 958 473 696 - 18,227
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Finance income - - - 89 - 89
Finance costs (974) - (224) - (105) (1,303)
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Profit before tax 15,126 958 249 785 (105) 17,013
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Taxation (2,995) (182) (62) (149) 20 (3,368)
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
Profit for the year 12,131 776 187 636 (85) 13,645
----------------------- ------------- --------------- --------- ------------- --------------- ------------------
52 week period ended 27 June 2020
Significant Movement Discounting
non-recurring- in the of deferred
impairment Fair consideration
Note value
Note 4 of
Significant interest As per
non-recurring rate Consolidated
other Defined swaps/ Statement
items Benefit foreign of
Operating Note Pension exchange Comprehensive
performance 4 Scheme contracts Income
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Revenue 306,348 - - - - - 306,348
Cost of sales (210,881) - - - - - (210,881)
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Gross profit 95,467 - - - - - 95,467
Other costs
excluding
depreciation
and
amortisation (69,219) (8,737) (1,594) 200 (73) - (79,423)
EBITDA 26,248 (8,737) (1,594) 200 (73) - 16,044
Depreciation
and
amortisation (11,309) - - - - - (11,309)
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Operating
profit 14,939 (8,737) (1,594) 200 (73) - 4,735
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Finance
income 61 - - - - - 61
Finance costs (1,272) - - (256) (386) (14) (1,928)
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Profit before
tax 13,728 (8,737) (1,594) (56) (459) (14) 2,868
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Taxation (3,398) 235 303 11 87 1 (2,761)
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Profit for
the year 10,330 (8,502) (1,291) (45) (372) (13) 107
-------------- ------------ ---------------- -------------- --------- ---------- --------------- --------------
Earnings per Share (EPS)
EPS comparatives to the prior year can be distorted by
significant non-recurring items and other items highlighted above.
The Board is focused on growing adjusted diluted EPS which is
calculated by eliminating the impact of the items highlighted above
as well as amortisation of intangibles and incorporates the
dilutive effect of share options. Adjusted diluted EPS is 8.6p
(2020: 7.7p).
2021 2020
------------------------- ----- -------
Basic EPS 9.8p (0.6)p
Adjusted basic EPS 9.1p 7.9p
Diluted** basic EPS 9.3p (0.6)p
Adjusted* diluted** EPS 8.6p 7.7p
*Further details on adjustments can be found in Note 7.
**Diluted EPS takes basic EPS and incorporates the dilutive
effect of share options.
Cash Flow
There was a net cash inflow before financing activities of
GBP15.3 million compared to GBP13.4 million in 2020 which includes,
lower working capital resulting in an inflow of GBP2.9 million
(2020: GBP1.0 million decrease) driven by higher levels of trading
accruals and lower stock levels as restrictions were eased and
activity increased. Corporation Tax payments made in the financial
year totalled GBP3.9 million (2020: GBP1.8 million) representing a
more normal level. Capital expenditure in the year amounted to
GBP6.2 million (2020: GBP4.7 million).
Debt and Bank Facilities
The Group's total net debt is GBP13.1 million (2020: GBP26.5
million), down GBP13.4 million from the prior year. Higher levels
of EBITDA and the temporary halt on dividend payments as cash was
preserved during the recovery period drove the reduction in net
debt.
The Group recognises the inherent risk from interest rate rises,
and uses interest rate swaps to mitigate these risks. The Group has
two swaps; one for GBP20.0 million for five years from 3 July 2017
(fixed) at 0.455% and one for GBP5.0 million for three years from
28 March 2019 (fixed) at 1.002%. The total balance of swaps at 26
June 2021 is GBP25.0 million (2020: GBP25.0 million). The
counterparty to these transactions is HSBC Bank Plc.
The effective interest rate for the Group during the year,
taking account of the interest rate swap in place with base rate at
0.10% and LIBOR at 0.052%, was 2.0% (2020: base rate 0.10% and
LIBOR at 0.691%, was 2.2%).
Financial Covenants
The Board reviews the Group's cash flow forecasts and key
covenants regularly, to ensure it has adequate facilities to cover
its trading and banking requirements with an appropriate level of
headroom. The forecasts are based on management's best estimates of
future trading. As noted earlier, there has been no breach of
covenants during the year and the Board do not expect any in the
forecast periods.
Interest cover (based on adjusted earnings before interest, tax,
depreciation and amortisation - EBITDA) for the 52 weeks to 26 June
2021 was 27.2 (2020: 25.3). Net bank debt to EBITDA (based on
adjusted EBITDA) for the 52 weeks to 26 June 2021 was 0.5 (2020:
1.1).
Taxation
The Group taxation charge for the year was GBP3.4 million (2020:
GBP2.8 million). The effective rate of tax on profits before
significant and non-recurring and other items is 19.8% (2020:
24.8%). You can find further details on the tax charge in Note 6 to
the Group's Financial Statements.
Financial and Non-Financial Key Performance Indicators
We monitor a range of financial and non-financial KPIs at site
level covering, amongst others, productivity, quality and health
and safety.
The Group Board receives a regular overview of all KPIs.
The Strategic Report was approved by the Board of Directors on
17 September 2021 and was signed on its behalf by:
Stephen Boyd
Director
Financial Statements
Consolidated Statement of Comprehensive Income
for the 52 weeks ended 26 June 2021 and 52 weeks ended 27 June
2020
2021 2020
Note GBP000 GBP000
-------------------------------------------------- ---- --------- ---------
Revenue 2 313,258 306,348
Cost of sales (210,273) (210,881)
--------------------------------------------------- ---- --------- ---------
Gross profit 102,985 95,467
--------------------------------------------------- ---- --------- ---------
Administrative expenses 3 (85,716) (80,401)
Administrative items - significant and
non-recurring 4 958 (10,331)
--------------------------------------------------- ---- --------- ---------
Operating profit 18,227 4,735
--------------------------------------------------- ---- --------- ---------
Finance income 5 89 61
Finance cost 5 (1,303) (1,928)
--------------------------------------------------- ---- --------- ---------
Net finance cost (1,214) (1,867)
--------------------------------------------------- ---- --------- ---------
Profit before tax 17,013 2,868
--------------------------------------------------- ---- --------- ---------
Taxation 6 (3,368) (2,761)
--------------------------------------------------- ---- --------- ---------
Profit for the financial year 13,645 107
--------------------------------------------------- ---- --------- ---------
Other comprehensive income/(expense)
Items that will not be reclassified to
profit and loss
Remeasurement on Defined Benefit Pension
Scheme 396 (3,806)
Movement in deferred taxation on Pension
Scheme liability 811 723
--------------------------------------------------- ---- --------- ---------
Other comprehensive income/(expense) for
the financial year, net of tax 1,207 (3,083)
--------------------------------------------------- ---- --------- ---------
Total comprehensive income/(expense) for
the financial year 14,852 (2,976)
--------------------------------------------------- ---- --------- ---------
Profit/(loss) attributable to:
Equity holders of the Parent 12,347 (759)
Non-controlling interest 1,298 866
--------------------------------------------------- ---- --------- ---------
Profit for the financial year 13,645 107
--------------------------------------------------- ---- --------- ---------
Total comprehensive income/(expense) attributable
to:
Equity holders of the Parent 13,554 (3,842)
Non-controlling interest 1,298 866
--------------------------------------------------- ---- --------- ---------
Total comprehensive income/(expense) for
the financial year 14,852 (2,976)
--------------------------------------------------- ---- --------- ---------
Earnings/(loss) per ordinary share
Basic 7 9.8 (0.6)
Diluted 7 9.3 (0.6)
The Notes on pages 18 to 28 form an integral part of these Financial
Statements.
Financial Statements
Consolidated Statement of Financial Position
at 26 June 2021 and 27 June 2020
Note 2021 2020
GBP000 GBP000
----------------------------------------------- ---- --------- ---------
Non-current assets
Intangibles 8 88,019 88,626
Property, plant and equipment 59,015 61,736
Deferred tax assets 5,961 4,623
----------------------------------------------- ---- --------- ---------
152,995 154,985
Current assets
Inventories 15,027 14,618
Trade and other receivables 50,986 40,003
Cash and cash equivalents 9,523 10,173
Other financial assets - fair value of
derivatives 405 -
----------------------------------------------- ---- --------- ---------
75,941 64,794
----------------------------------------------- ---- --------- ---------
Total assets 228,936 219,779
----------------------------------------------- ---- --------- ---------
Current liabilities
Other interest-bearing loans and borrowings 9 (2,039) (3,191)
Trade and other payables (62,490) (48,861)
Provisions (222) (471)
Other financial liabilities - fair value
of derivatives (121) (501)
Deferred consideration (976) (481)
Current tax liabilities (689) (1,375)
----------------------------------------------- ---- --------- ---------
(66,537) (54,880)
----------------------------------------------- ---- --------- ---------
Non-current liabilities
Other interest-bearing loans and borrowings 9 (31,029) (45,113)
Provisions (160) (550)
Deferred consideration (466) (1,357)
Deferred tax liabilities (2,944) (2,117)
Pension fund liability (14,529) (15,174)
----------------------------------------------- ---- --------- ---------
(49,128) (64,311)
----------------------------------------------- ---- --------- ---------
Total liabilities (115,665) (119,191)
----------------------------------------------- ---- --------- ---------
Net assets 113,271 100,588
----------------------------------------------- ---- --------- ---------
Equity attributable to equity holders
of the Parent
Share capital 1,304 1,304
Share premium account 64,956 64,956
Capital redemption reserve 578 578
Employee share reserve (5,374) (3,378)
Retained earnings 49,021 34,918
----------------------------------------------- ---- --------- ---------
110,485 98,378
Non-controlling interest 2,786 2,210
----------------------------------------------- ---- --------- ---------
Total equity 113,271 100,588
----------------------------------------------- ---- --------- ---------
The Financial Statements on pages 14 to 17 were approved by the
Board of Directors on 17 September 2021 and were signed on its
behalf by:
Stephen Boyd (Director)
Registered Number 00204368
The Notes on pages 18 to 28 form an integral part of these
Financial Statements.
Financial Statements
Consolidated Statement of Changes in Equity
for the 52 weeks ended 26 June 2021
Capital Employee
Share Share redemption share Retained Non-controlling Total
capital premium reserve reserve earnings interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Balance at 30 June
2019 1,304 64,956 578 (3,616) 44,207 2,188 109,617
Profit for the financial
year - - - - (759) 866 107
Other comprehensive:
Remeasurement on Defined
Benefit Pension - - - - (3,806) - (3,806)
Deferred tax movement
on pension Scheme
remeasurement - - - - 723 - 723
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Total other
comprehensive
expense - - - - (3,083) - (3,083)
------------------------ --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Total comprehensive
(expense)/income for
the period - - - - (3,842) 866 (2,976)
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Transactions with
owners, recorded
directly
in equity:
Shares issued from
EBT - - - 1,207 (1,207) - -
Shares acquired during
the year - - - (969) - - (969)
Impact of share-based
payments - - - - (1,066) - (1,066)
Deferred tax on share
options - - - - (182) - (182)
Foreign exchange
translation
differences - - - - (17) - (17)
Dividend paid - - - - (2,975) (844) (3,819)
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Balance at 27 June
2020 1,304 64,956 578 (3,378) 34,918 2,210 100,588
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Balance at 28 June
2020 1,304 64,956 578 (3,378) 34,918 2,210 100,588
Profit for the financial
year - - - - 12,347 1,298 13,645
Other comprehensive: - - - -
Remeasurement on Defined
Benefit Pension - - - - 396 - 396
Deferred tax movement
on pension Scheme
remeasurement - - - - 811 - 811
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Total other
comprehensive
income - - - - 1,207 - 1,207
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Total comprehensive
(expense)/income for
the period - - - - 13,554 1,298 14,852
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Transactions with
owners, recorded
directly
in equity:
Shares acquired during
the year - - - (1,996) - - (1,996)
Impact of share-based
payments - - - - 1,001 - 1,001
Deferred tax on share
options - - - - 89 - 89
Foreign exchange
translation
differences - - - - (541) - (541)
Dividend paid - - - - - (722) (722)
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
Balance at 26 June
2021 1,304 64,956 578 (5,374) 49,021 2,786 113,271
------------------------ --------- --------------------------- ------------------- ------------------- -------------- --------------- --------------------- ---------------------------
The Notes on pages 18 to 28 form an integral part of these Financial Statements.
Financial Statements
Consolidated Cash Flow Statement
for the 52 weeks ended 26 June 2021
Note 2021 2020
GBP000 GBP000
-------------------------------------------------- ---- -------- --------
Cash flows from operating activities
Profit for the financial year 13,645 107
Adjustments for:
Depreciation 3 7,235 7,656
Depreciation right-of-use assets 3 1,752 1,919
Significant non-recurring items 4 (1,125) 1,594
Impairment of fixed assets 4 167 1,237
Impairment of goodwill 4,8 - 7,500
Net finance costs 5 1,214 1,867
Taxation 6 3,368 2,761
Amortisation of intangibles 8 1,817 1,734
Change in fair value of foreign exchange
contracts (696) 73
Contributions by employer to pension scheme (473) (200)
Operating profit before changes in working
capital 26,904 26,248
Changes in working capital:
(Increase)/decrease in inventories (568) 210
(Increase)/decrease in trade and other
receivables (11,274) 9,949
Increase/(decrease) in trade and other
payables 14,749 (9,192)
-------------------------------------------------- ---- -------- --------
Cash generated from operations before
costs of disposals and acquisitions 29,811 27,215
Costs relating to closure of bakeries
and commissioning (364) (1,887)
Lease payments (2,789) (3,362)
Interest paid (715) (1,088)
Tax paid (3,926) (1,822)
-------------------------------------------------- ---- -------- --------
Net cash generated from operating activities 22,017 19,056
-------------------------------------------------- ---- -------- --------
Cash flows from investing activities
Purchase of property, plant and equipment
and intangibles (6,190) (4,703)
Purchase of companies (500) (1,000)
-------------------------------------------------- ---- -------- --------
Net cash used in investing activities (6,690) (5,703)
-------------------------------------------------- ---- -------- --------
Cash flows from financing activities
Repayment of revolving credit (13,753) (10,960)
Purchase of shares by Employee Benefit
Trust (1,996) (969)
Dividend paid to non-controlling interest (722) (844)
Dividend paid to shareholders - (2,975)
-------------------------------------------------- ---- -------- --------
Net cash generated used in financing activities (16,471) (15,748)
-------------------------------------------------- ---- -------- --------
Net decrease in cash and cash equivalents (1,144) (2,395)
Opening cash and cash equivalents 10,173 12,358
Effect of exchange rate fluctuations on
cash held 494 210
-------------------------------------------------- ---- -------- --------
Cash and cash equivalents at end of period 9,523 10,173
-------------------------------------------------- ---- -------- --------
The Notes on pages 18 to 28 form an integral part of these Financial
Statements.
Notes to the Consolidated Financial Statements
Presentation of Financial Statements
Basis of Preparation
The financial information on pages 14 to 17 is extracted from
the Group's consolidated financial statements for the 52 week
period ended 26 June 2021, which were approved by the Board of
Directors on 17 September 2021.
The financial information does not constitute statutory accounts
within the meaning of sections 434(3) and 435(3) of the Companies
Act 2006 or contain sufficient information to comply with the
disclosure requirements in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006. The "requirements of the Companies Act 2006" here means
accounts in accordance with "International Accounting Standards" as
defined in section 474(1) of that Act, as it applied immediately
before Implementation Period ('IP') completion day (end of
transition period), including where the Group also makes use of
standards which have been adopted for use within the United Kingdom
in accordance with regulation 1(5) of the International Accounting
Standards and the European Public Limited Liability Company
(Amendment etc.) (EU Exit) Regulations 2019
The Company's auditors, PricewaterhouseCoopers LLP, have given
an unqualified report on the consolidated financial statements for
the 52 week period ended 26 June 2021. The auditors' report did not
include reference to any matters to which the auditors drew
attention without qualifying their report and did not contain any
statement under section 498 of the Companies Act 2006. The
consolidated financial statements will be filed with the Registrar
of Companies, subject to their approval by the Company's
shareholders on 20 November 2021 at the Company's Annual General
Meeting.
Basis of Accounting
The Group's consolidated Financial Statements for the year ended
26 June 2021 have been prepared and approved by the Directors in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. The Directors are
satisfied that the Group has adequate resources to continue to
operate for a period of not less than 12 months from the date of
approval of the financial statements and that there are no material
uncertainties around their assessment. Accordingly, the Directors
continue to adopt the going concern basis of accounting.
The Group's principal accounting policies have been consistently
applied throughout the year and will be set out in the notes to the
Group's 2021 Annual Report.
Going Concern and Impact of Covid-19
In the current climate where there is uncertainty around the
impact of Covid-19, relevant judgements and assumptions have to be
made. This will include the impact of Covid-19 on the economic
recovery. The extent and duration of social distancing measures
will impact demand and the workforce. The grocery sector has been
heavily impacted by the pandemic as consumers respond to the
ever-evolving situation particularly with the new variants of the
virus and the speed of the vaccination roll-out programme. The
health and safety of our employees is a top priority and UK
Government guidelines are being adhered to with regards to social
distancing and working remotely.
The Group has demonstrated a robust performance driven by a
resilient supply chain and production network in order to navigate
through the challenging trading environment. As a manufacturer of a
wide range of baked goods, the Covid-19 impact has varied
considerably between businesses. The hospitality sector outdoors
and take home grocery sales remain strong, driven by measures of
lockdown easing and continued drinking and eating at home with
consumer behaviour adjusting to the unwinding of lockdown measures.
Demand recovery is anticipated across businesses at different rates
with category demand evolving. We should expect different paces of
correction for different markets, dictated by factors such as
weather, holidays and working patterns. When considering going
concern judgement has to be made as to the extent of disruption,
the ongoing challenges and the speed of recovery. Forecasts have
been built on a bottom up basis and stress tested to prepare an
approved budget used as a basis for reviewing going concern. Having
reviewed the Group's short and medium-term plans and available
financial facilities, the Board has reasonable expectations that
the Group has adequate resources to continue in operational
existence for the next 12 months and the foreseeable future.
The Group meets its funding requirements through internal cash
generation and bank credit facilities, which are committed until
February 2023. Committed banking facilities are GBP55.0 million
with a further accordion available of GBP35.0 million, net bank
debt at the year end was GBP13.1 million. The Group's forecasts and
projections, taking account of reasonably possible changes in
trading performance, show that the Group will be able to operate
comfortably within its current bank facilities. The Group has a
relatively conservative level of debt to earnings.
The Board reviews the Group's covenants on a regular basis to
ensure that it has adequate facilities to cover its trading and
banking requirements with an appropriate level of headroom. The
forecasts are based on management's best estimates of future
trading. There has been no breach of covenants during the year and
none expected during the next 12 months. All covenant tests were
passed at the year end.
The performance of the Group has been robust and resilient with
strong trading driven by improving volume performance and the
benefits of the Group's Operating Brilliance Programme. After
making enquiries, the Directors have a reasonable expectation that
the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly, the
Board continues to adopt the going concern basis in preparing the
Financial Statements for both the Group and the Parent Company. The
Financial Statements have been prepared under the historical cost
convention, as modified by the revaluation of derivative financial
instruments and pension Scheme assets.
1. Significant Accounting Policies
New and Upcoming Standards
The following new standards, new interpretations and amendments
to standards and interpretations are applicable for the first time
for the financial year ended 26 June 2021.
-- Amendment to IFRS 16 "Leases" - Covid-19 related rent concessions (effective 1 June 2020);
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Interest Rate Benchmark Reform - Phase 2 (effective on or after 1
January 2021 with early application permitted);
-- Amendments to IFRS 17 and IFRS 4 "insurance contracts",
deferral of IFRS 9, as amended June 2020 (effective on or after 1
January 2021);
None of the amendments to the above standards had a material
impact on the Financial Statements.
There are a number of new standards, interpretations and
amendments to existing standards that are not yet effective and
have not been adopted early by the Group. The future introduction
of these standards is not expected to have a material impact on the
Financial Statements of the Group.
-- Amendments to IFRS 3 - Business Combinations (effective 1 January 2022);
-- Amendments to IAS 16 - Property, Plant and Equipment (effective 1 January 2022);
-- Amendments to IAS 37 - Provisions, Contingent Liabilities and
Contingent Assets (effective 1 January 2022);
-- Amendments to IAS 1, Practice statement 2 and IAS 8 -
Accounting policies, Changes in Accounting Estimates and Errors
(effective 1 January 2022);
-- Annual improvements to IFRS standards 2018-2020 - IFRS 1,
IFRS 9, IAS 41 (effective 1 January 2022);
-- Amendments to IAS 1 - Presentation of Financial Statements on
Classification of Liabilities (effective 1 January 2023).
Work will continue in the new financial year to assess the
impact of the new standards and interpretations on the Group's
Financial Statements.
2. Revenue and Segment Information
Operating segments are identified on the basis of the internal
reporting and decision making. The Group's Chief Operating Decision
Maker is deemed to be the Board as it is primarily responsible for
the allocation of resources to segments and the assessment of
performance by segment. The Board assesses profit performance
principally through adjusted profit measures consistent with those
disclosed in the Annual Report and Accounts.
The UK bakery segment manufactures and sells bakery products to
UK grocery and foodservice sectors. It comprises six subsidiaries
all of which manufacture and supply food products through the
channels described above. These subsidiaries have been aggregated
into one reportable segment as they share similar economic
characteristics. The economic indicators considered are the nature
of the products and production process, the type and class of
customer, the method of distribution and the regulatory
environment.
The overseas segment procures and sells bakery products to
European grocery and foodservice sectors. It comprises Lightbody
Europe and Ultraeuropa. Ultraeuropa has manufacturing facilities in
Poland where it manufactures and sells Free From bakery products
into the European markets.
The UK bakery segment also made sales directly to overseas
markets.
Revenue UK bakery Overseas Total Group
52 weeks to 26 June 2021 2020 2021 2020 2021 2020
2021 and 52 weeks GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
to 27 June 2020.
--------- --------- --------- --------- --------- ---------
Total 273,633 271,414 39,625 34,934 313,258 306,348
--------- --------- --------- --------- --------- ---------
Reportable Segments 52 weeks to 52 weeks to
26 June 2021 27 June 2020
GBP000 GBP000
Total Total
-------------------------------------- -------------- --------------
Revenue UK bakery 273,633 271,414
Revenue overseas 39,625 34,934
-------------------------------------- -------------- --------------
Total revenue 313,258 306,348
-------------------------------------- -------------- --------------
Adjusted operating profit UK
bakery 13,609 13,162
Adjusted operating profit overseas 2,491 1,777
Total adjusted operating profit 16,100 14,939
-------------------------------------- -------------- --------------
Significant non-recurring impairment - (8,737)
Significant non-recurring other 958 (1,594)
Defined Benefit Pension Scheme 473 200
Fair value foreign exchange
contracts 696 (73)
-------------------------------------- -------------- --------------
Operating profit 18,227 4,735
Finance income 89 61
Finance expense (1,303) (1,928)
-------------------------------------- -------------- --------------
Net finance cost (1,214) (1,867)
-------------------------------------- -------------- --------------
Profit before taxation 17,013 2,868
-------------------------------------- -------------- --------------
Taxation (3,368) (2,761)
-------------------------------------- -------------- --------------
Profit for the financial year 13,645 107
-------------------------------------- -------------- --------------
The Group has three customers (2020: three) which individually
account for 10 per cent or more of the Group's total revenue. These
customers individually account for 23%, 12% and 10%. In the prior
year these same three customers accounted for 21%, 12% and 10% of
the revenue in the 52 weeks to 27 June 2020. In addition to the
Europe sales disclosed in Reportable Segments, the Group also made
sales to European markets through UK-based organisations.
3. Administrative Expenses and Auditors' Remuneration
Included in profit are the following:
2021 2020
GBP000 GBP000
---------------------------------------------- ------ ------
Amortisation of intangibles 1,817 1,734
Depreciation of owned tangible assets 7,235 7,656
Depreciation on right-of-use assets 1,752 1,919
Impairment of fixed assets 167 1,237
Impairment of goodwill - 7,500
Loss on foreign exchange 235 213
Variable lease payments 203 193
Expenses relating to short-term and low-value
leases 51 164
Movement on fair value of foreign exchange
contracts (696) 73
Research and development 2,124 2,244
Share option charges 1,001 145
---------------------------------------------- ------ ------
Auditors' remuneration:
2021 2020
GBP000 GBP000
------------------------------------------------------- ------ ------
Audit of these Financial Statements 50 50
Audit of the Financial Statements of subsidiaries
of the Company 133 118
Other services 41 20
Other services relate to assistance with non-UK VAT registrations.
4. Significant Non-Recurring Items
The Group presents certain items as significant and
non-recurring. These relate to items which, in management's
judgement, need to be disclosed by virtue of their size or
incidence in order to obtain a more meaningful understanding of the
financial information. They reflect costs that will not be repeated
and therefore do not reflect ongoing trading of business which is
most meaningful to users.
Included within significant non-recurring items shown in the
table on page 11 of the Financial Review section are the following
costs:
2021 2020
GBP000 GBP000
------------------------------------------- ------ --------
Release of onerous lease and closure costs
provision 1,340 -
Litigation and legal costs (388) -
Commissioning costs - (257)
Impairment of goodwill (refer to Note 8) - (7,500)
Impairment of fixed assets (167) (1,237)
Other reorganisation people costs 173 (1,337)
958 (10,331)
------------------------------------------- ------ --------
The release of provisions includes GBP0.8 million of lease costs
avoided due to successful re-letting of closed sites plus GBP0.4
million of related closure costs and GBP0.2 million of unused
reorganisation provisions. Legal costs have been accrued in
relation to a dispute and costs of GBP0.2 million relating to fixed
assets are the final impairment at Cardiff.
In the prior year we had the impairment of unused assets in
Cardiff and an impairment of goodwill on the Ultrapharm acquisition
based on trading at the time, as well as re-organisation costs
relating to changes made in response to the pandemic.
5. Finance Income and Cost
Recognised in the Consolidated Statement of Comprehensive
Income
2021 2020
GBP000 GBP000
Finance income
Interest on interest rate swap agreements - 44
Change in fair value of interest rate swaps 89 -
Bank interest receivable - 17
Total finance income 89 61
------------------------------------------------ ------- -------
Finance cost
Interest on net pension position (224) (256)
Interest on interest rate swap agreements (119) (386)
Bank interest payable (545) (999)
Unwinding of discount on deferred consideration (105) (14)
Interest on deferred consideration (36) -
Lease liabilities (274) (273)
Total finance cost (1,303) (1,928)
------------------------------------------------ ------- -------
6. Taxation
Recognised in the Consolidated Statement of Comprehensive
Income
2021 2020
GBP000 GBP000
Current tax
Current year 3,277 2,762
Adjustments for prior years (263) 6
------------------------------ -------- --------
Total current tax 3,014 2,768
------------------------------ -------- --------
Deferred tax
Origination and reversal of
temporary differences 95 130
Rate change 252 (222)
Adjustments for prior years 7 85
------------------------------ -------- --------
Total deferred tax 354 (7)
------------------------------ -------- --------
Total tax expense 3,368 2,761
------------------------------ -------- --------
Reconciliation of Effective Tax Rate
The weighted average hybrid rate of UK, Polish and French tax is
20.5% (2020: 22.6%). The tax assessed for the period is lower
(2020: higher) than the hybrid rate of UK and French tax. The UK
corporation tax rate for the period is 19.0% (2020: 19.0 %). The
differences are explained below:
2021 2020
GBP000 GBP000
Profit before taxation 17,013 2,868
Non-deductible intangible impairment - 7,500
------------------------------------------------ ------ ------
17,013 10,368
------------------------------------------------ ------ ------
Tax using the UK corporation tax rate of 19.0%,
(2020: 19.0%) 3,232 1,970
Overseas profits charged at different taxation
rate 151 439
Non-deductible expenses and timing differences 480 479
Restatement of opening net deferred tax due
to rate change and differences in rates 298 (218)
R&D reclaim (537) -
Adjustments to tax charge in respect of prior
periods (256) 91
Total tax expense 3,368 2,761
================================================ ====== ======
The UK corporation tax rate increase from 19.0% to 25.0% from 1
April 2023 was substantively enacted in March 2021. The deferred
tax assets and liabilities at 26 June 2021 have been calculated
based on a rate at which they are expected to crystallise which is
likely to be 19.0% or 25.0%.
The adjustment of GBP256,000 for the prior year includes
ineligible capital spends and disallowable expenses being different
to the assumed levels at the time of preparation of the Annual
Report.
The Company has an unrecognised deferred tax asset of GBP239,000
(2020: GBP182,000) relating to capital losses carried forward. This
asset has not been recognised in the Financial Statements as it is
not expected that suitable gains will arise in the future in order
to utilise the underlying capital losses.
7. Earnings/(Loss) Per Ordinary Share
Basic earnings per share for the period is calculated on the
basis of profit for the year after tax, divided by the weighted
average number of shares in issue being 125,805,000 (2020:
127,128,000).
Basic diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares in issue to assume
conversion of all potential dilutive ordinary shares. At 26 June
2021, the diluted weighted average number of shares in issue was
132,753,000, (2020: 130,820,000).
An adjusted earnings per share has been calculated to show the
trading performance of the Group. These adjusted earnings per share
exclude:
-- Reorganisation and other significant non-recurring items
-- IFRS 9 'Financial Instruments: Recognition and Measurement'
fair value adjustment relating to the Group's interest rate swaps
and foreign exchange contracts
-- IAS 19 (revised) 'Accounting for retirement benefits' relating to net income
-- The taxation effect at the appropriate rate on adjustments
-- Amortisation of intangible assets
52 weeks to 52 weeks to
26 June 2021 27 June 2020
------------------------------------- -------------------- --------------------
Profit GBP000 GBP000
(Loss)/profit attributable to
equity holders of Company (basic) 12,347 (759)
Significant non-recurring and
other items (1,514) 10,223
Intangible amortisation net of
deferred tax 574 574
------------------------------------- -------------------- --------------------
Numerator for adjusted earnings
per share calculation (adjusted
basic) 11,407 10,038
------------------------------------- -------------------- --------------------
Shares Basic Diluted Basic Diluted
'000 '000 '000 '000
------------------------------------- --------- --------- --------- ---------
Weighted average number of ordinary
shares in issue during the period 125,805 125,805 127,128 127,128
Dilutive effect of share options - 6,948 - 3,692
------------------------------------- --------- --------- --------- ---------
125,805 132,753 127,128 130,820
------------------------------------- --------- --------- --------- ---------
Basic Diluted Basic Diluted
Earnings/(loss) per share pence pence pence pence
------------------------------------- --------- --------- --------- ---------
Basic and diluted 9.8 9.3 (0.6) (0.6)
Adjusted basic and adjusted diluted 9.1 8.6 7.9 7.7
------------------------------------- --------- --------- --------- ---------
Significant non-recurring and other items net of taxation are
tabled in the Financial Review on page 11 and comprise: significant
non-recurring income GBP776,000 (2020: GBP1,291,000 charge),
Defined Benefit Pension Scheme income GBP187,000 (2020: charge
GBP45,000), fair value of interest rate swaps, foreign exchange
contracts income GBP636,000 (2020: GBP372,000 charge), the
unwinding of deferred consideration discounting charge GBP85,000
(2020: charge GBP13,000) and impairment of goodwill and fixed
assets in the prior year of GBP8,502,000.
8. Intangibles
Intangible assets comprise customer relationships, brands and
goodwill.
Goodwill Business Brands Customer Total
systems and licences relationships
GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------- --------- --------- -------------- --------------- ---------
Cost at 30 June 2019 85,004 9,981 3,683 7,630 106,298
Additions - 196 - - 196
------------------------------- --------- --------- -------------- --------------- ---------
Cost at 27 June 2020 85,004 10,177 3,683 7,630 106,494
------------------------------- --------- --------- -------------- --------------- ---------
Additions - 1,045 - - 1,045
------------------------------- --------- --------- -------------- --------------- ---------
Transfers from tangible fixed
assets - 165 - - 165
------------------------------- --------- --------- -------------- --------------- ---------
Cost at 26 June 2021 85,004 11,387 3,683 7,630 107,704
------------------------------- --------- --------- -------------- --------------- ---------
Accumulated amortisation
at 30 June 2019 (4,290) (826) (1,502) (2,016) (8,634)
------------------------------- --------- --------- -------------- --------------- ---------
Charge for the year - (1,025) (143) (566) (1,734)
Impairment (7,500) - - - (7,500)
------------------------------- --------- --------- -------------- --------------- ---------
Accumulated amortisation
at 27 June 2020 (11,790) (1,851) (1,645) (2,582) (17,868)
------------------------------- --------- --------- -------------- --------------- ---------
Charge for the year - (1,108) (143) (566) (1,817)
Impairment - - - - -
------------------------------- --------- --------- -------------- --------------- ---------
Accumulated amortisation
at 26 June 2021 (11,790) (2,959) (1,788) (3,148) (19,685)
------------------------------- --------- --------- -------------- --------------- ---------
Net book value at 30 June
2019 80,714 9,155 2,181 5,614 97,664
------------------------------- --------- --------- -------------- --------------- ---------
Net book value at 27 June
2020 73,214 8,326 2,038 5,048 88,626
------------------------------- --------- --------- -------------- --------------- ---------
Net book value at 26 June
2021 73,214 8,428 1,895 4,482 88,019
------------------------------- --------- --------- -------------- --------------- ---------
The customer relationships recognised in the opening costs were
purchased as part of the Ultrapharm acquisition in September 2018
and the acquisition of Fletchers Group of Bakeries in October 2014.
They are considered to have finite useful lives and are amortised
on a straight-line basis over their estimated useful lives of
twenty years for brands and between ten and fifteen years for
customer relationships. The intangibles were valued using an income
approach, using multi-period excess earnings method for customer
relationships and Relief from Royalty Method for brand valuation.
The amortisation of intangibles has been charged to administrative
expenses in the Consolidated Statement of Comprehensive Income. The
business systems are considered to have finite useful lives and are
amortised on a straight-line basis over their estimated useful
lives of ten years.
Goodwill has arisen on acquisitions and reflects the future
economic benefits arising from assets that are not capable of being
identified individually and recognised as separate assets. The
goodwill reflects the anticipated profitability and synergistic
benefits arising from the enlarged Group structure. The goodwill is
the balance of the total consideration less fair value of assets
acquired and identified. The carrying value of the goodwill is
reviewed annually for impairment. The carrying value of all
goodwill has been assessed during the year.
8. Intangibles (continued)
The Group tests goodwill for impairment on an annual basis, or
more frequently if there are indications that the goodwill may be
impaired. The recoverable amounts of the cash generating units are
determined from value in use calculations. The key assumptions for
the value in use calculations are the discount and growth rates
used for future cash flows and the anticipated future changes in
revenue, direct costs and indirect costs. The assumptions used
reflect the past experience of management and future
expectations.
There have been major disruptions to markets since March 2020 as
a result of the impact of the Covid-19 pandemic. Post Covid-19
consumer spending behaviour and lifestyle choices are an unknown.
With knowledge and experience throughout varying degrees of
lock-down and recoveries, a bottom up full year 2022 budget and
strategic forecast to June 2024 has been compiled.
The forecasts have taken in consideration the following key
factors:
1. Post Covid-19 recovery of sales in full for FY 2022 with bounce-back of foodservice demand.
2. Latest market forecast and market research data has been
considered when making commercial judgements.
3. Detailed SWOT analysis of all businesses with a strategic plan to respond to challenges.
4. Plans to combat inflationary pressures particularly labour costs in UK and Europe.
5. Detailed plans supporting strategic initiatives and strategy
into action with continued focus in the Operating Brilliance
Programme, Process Blueprint, value engineering, asset management
and care.
6. Organisational design and engagement activity to provide
bakery teams to support our strategy.
The forecasts covering a three-year period are based on the
detailed financial forecasts challenged and approved by management
for the next three years. The cashflows beyond this forecast are
extrapolated to perpetuity using a 1.5% (2020: 1.1%) growth rate
for all of the CGUs with the exception of Ultrapharm where growth
of 2.9% (2020: 2.9%) has been assumed. The starting position has
been impacted by Covid-19 and growth we believe is relatively
prudent when compared to long-term UK GDP basis, to reflect the
uncertainties of forecasting further than three years. Changes in
revenue and direct costs in the detailed three-year plan are based
on past experience and expectations of future changes in the market
to the extent that can be anticipated.
The strategic forecast process commenced in November 2020 to
review consumer and competitor insight to prepare the foundations
for the financial forecasts. The strategic forecasts have included
assumptions on the post lockdown environment and the journey to
recovery. We have been encouraged by the performance in retail and
the recovery in the foodservice sector, with revenue trends
improving since the initial lockdown in March 2020.
The revenue growth rate in the strategic forecast combines
volume, mix and price of products. An inflation factor has been
applied to costs of sales, variable costs and indirect costs and
takes into consideration the general rate of inflation, movements
in commodities, improvement in efficiencies from capital investment
and operations and purchasing initiatives. External market data and
trends are considered when predicting growth rates. Compound annual
growth rates for revenues for the three-year forecast period range
from 5.8% to 9.1%, reflecting the recovery from the lower base year
and budget year that have been impacted by the Covid-19 pandemic
and the business wins during the pandemic.
A post-tax discount rate of 8.2% (2020: 7.6%) has been used in
these calculations, the equivalent pre tax rates are 11.0%
(2020:9.2%). The discount rate uses weighted average cost of
capital which reflects the returns on government bonds and an
equity risk premium adjusted specifically for Finsbury plus further
risk premiums that consider cash generating unit risk. The Group
has considered the economic environment and higher level of return
expected by equity holders due to the perceived risk in equity
markets when selecting the discount rate. The discount rate has
increased over the prior year rate as a result of a lower debt
position and an increase in the risk-free rate. The discount rate
used for each cash generating unit has been kept constant as the
market risk is deemed not to be materially different between the
different segments of the bakery sector, nor over time. When
considering the Ultrapharm discount rate a further 0.5% has been
added for the overseas risk element.
8. Intangibles (continued)
The table below shows the carrying values of goodwill allocated
to cash generating units or groups of cash generating units. When
calculating the discount rate that would need to be applied for
there to be zero headroom, the discounted cashflows were compared
against the carrying amount of goodwill, plant property and
equipment and right-of-use assets. The discount rates are shown in
the table below:
Carrying value Post-tax discount Pre-tax discount
of goodwill rate at which rate at which
headroom is nil headroom is nil
2021 2020 2021 2020 2021 2020
GBP000 GBP000 % % % %
------------------- -------- -------- ---------- -------- ---------- -------
Lightbody of
Hamilton 45,698 45,698 17.2 17.2 22.9 20.7
Fletchers Bakery 20,118 20,118 12.9 10.3 17.2 12.4
Ultrapharm* 4,046 4,046 9.6 7.9 12.8 9.5
Nicholas & Harris 2,980 2,980 44.3 42.6 59.1 51.3
Johnstone's Food
Service 372 372 122.8 76.6 163.7 92.3
------------------- -------- -------- ---------- -------- ---------- -------
73,214 73,214
------------------- -------- -------- ---------- -------- ---------- -------
Impairment
The post-tax discount rate at which the headroom is nil for
Fletchers Bakery is 12.9%. There are key strategies and plans in
place in order to improve the performance of Fletchers. Increased
volumes have been budgeted as schools, hospitality and leisure
industries re-open after Covid lockdown closures, and decrease in
retail demand has been considered as the hospitality industry
begins to re-open. A strong bounce-back is anticipated in
out-of-home and growth in buns and rolls with strategic partnering,
new product development opportunities, by growing our own bakery
foodservice brand and working with strategic end user customers.
There are also further opportunities to drive margin mix upwards
through value added and value engineering, price and new
development. Sensitivities have been carried out to exclude any
growth, which, after returning to pre- Covid-19 level of sales,
demonstrates that headroom still exists. It has been concluded that
no impairment was necessary on the carrying value of goodwill
relating to Fletchers Bakery at 26 June 2021.
The post-tax discount rate at which the headroom is nil for
Ultrapharm Limited is 9.6%. There are key strategies in place in
order to improve the performance of Ultrapharm. Targeted new
product development recruitment and a better understanding of
intellectual property has been a key breakthrough in developing new
and existing product development, with new products being launched
in the year to 26 June 2021. Growth with our retail partners is
driven by the developments of new products and improved customer
confidence. There are also further opportunities in accelerating
growth in our own gluten-free brand. Sensitivities have been
carried out to exclude any growth, which, after returning to pre-
Covid-19 level of sales, demonstrates that headroom still exists.
It has been concluded that no impairment was necessary on the
carrying value of goodwill relating to Ultrapharm Limited at 26
June 2021.
Sensitivity analyses have been carried out by the Directors on
the carrying value of all remaining goodwill using post-tax
discount rates up to 12.5%, which would not result in an impairment
of any cash generating units.
Further sensitivity analysis has been carried out using a range
of factors such as growth rate and cost increases, which would not
result in an impairment. These include:
-- If future growth rate assumption of 1.0% was replaced with zero growth rate.
-- If future growth rate assumption of 1.0% was replaced with a decline of 1.0%.
Traction has been gained over the period impacted by the
pandemic in Group-wide initiatives to instil the Finsbury ways of
working throughout. A more engaged workforce, standardised
processes, asset care and management and supply chain initiatives
are driving improvements in efficiencies across the Group to
strengthen our growth position.
Prior Year Impairment
An impairment charge was taken against the Ultrapharm cash
generating units in the prior year. The business proved more
immature than expected and additional resource was invested into
both the UK and Polish businesses. We faced commercial issues (in
part relating to a small warranty claim) exacerbated by Covid-19
which had adversely affected cashflows and hence valuation. We
believe the gluten-free sector remains attractive and that
performance will meet our expectations over time. The conclusion
was that, considering all those factors, the business was
overvalued. The strategic forecast revenues and profits had been
sensitised and a downside forecast had been considered giving
reduced cashflow assumptions, which when compared to the carrying
value of assets had indicated an impairment was necessary. A
non-cash impairment of GBP7.5 million was recognised in the prior
year's financial results. The downside forecast had been used as a
basis for calculating the impairment charge. Revenue in this
forecast was expected to grow over the next three years at an
annual growth rate of 10.0%.
9. Other Interest-Bearing Loans and Borrowings
This Note provides information about the contractual terms and
repayment terms of the Group's interest-bearing loans and
borrowings, which are measured at amortised cost, using the
effective interest rate method.
2021 Statutory Margin Frequency Year of Facility Drawn Current Non-current
of maturity GBP000 GBP000 GBP000 GBP000
repayments
-------------------- ------------ ----------- ---------- --------- -------- -------- -----------
Revolving credit 1.50%/LIBOR Varies 2023 55,000 22,431 - 22,431
Leases* Various Monthly Various 10,745 2,039 8,706
Unamortised transaction
costs (108) - (108)
---------------------------------- ----------- ---------- --------- -------- -------- -----------
33,068 2,039 31,029
--------------------------------- ----------- ---------- --------- -------- -------- -----------
*Leases include all leases recognised as lease liabilities under
IFRS 16. Lease liabilities are shown separately in the table
below to show total bank debt as defined by our banking facility
agreement, which only recognises leases as defined as finance
leases under IAS 17 as part of bank debt.
2021 Margin Frequency Year of Facility Drawn Current Non-current
of maturity GBP000 GBP000 GBP000 GBP000
repayments
-------------------- ------------ ----------- ---------- --------- -------- -------- -----------
Revolving credit 1.50%/LIBOR Varies 2023 55,000 22,431 - 22,431
Finance lease
(under IAS 17) Various Monthly 2023 220 128 92
Unamortised transaction
costs (108) - (108)
---------------------------------- ----------- ---------- --------- -------- -------- -----------
Total bank debt 22,543 128 22,415
---------------------------------- ----------- ---------- --------- -------- -------- -----------
Operating leases
(under IAS 17) 2.2% Varies 10,525 1,911 8,614
--------------------- ----------- ----------- ---------- --------- -------- -------- -----------
Total debt 33,068 2,039 31,029
2020 Statutory Margin Frequency Year of Facility Drawn Current Non-current
of maturity GBP000 GBP000 GBP000 GBP000
repayments
-------------------- ------------ ----------- ---------- --------- -------- -------- -----------
Revolving credit 1.50%/LIBOR Varies 2023 55,000 36,184 - 36,184
Leases* Various Monthly Various 12,295 3,191 9,104
Unamortised transaction
costs (175) - (175)
---------------------------------- ----------- ---------- --------- -------- -------- -----------
48,304 3,191 45,113
--------------------------------- ----------- ---------- --------- -------- -------- -----------
*Leases include all leases recognised as lease liabilities under
IFRS 16. Lease liabilities are shown separately in the table
below to show total bank debt as defined by our banking facility
agreement, which only recognises leases as defined as finance
leases under IAS 17 as part of bank debt.
2020 Margin Frequency Year of Facility Drawn Current Non-current
of maturity GBP000 GBP000 GBP000 GBP000
repayments
-------------------- ------------ ----------- ---------- --------- -------- -------- -----------
Revolving credit 1.50%/LIBOR Varies 2023 55,000 36,184 - 36,184
Finance lease
(under IAS 17) Various Monthly 2023 472 247 225
Unamortised transaction
costs (175) - (175)
---------------------------------- ----------- ---------- --------- -------- -------- -----------
Total bank debt 36,481 247 36,234
---------------------------------- ----------- ---------- --------- -------- -------- -----------
Operating leases
(under IAS 17) 2.2% Varies 11,823 2,944 8,879
--------------------- ----------- ----------- ---------- --------- -------- -------- -----------
Total debt 48,304 3,191 45,113
All of the above loans are denoted in pounds Sterling, with
various interest rates and maturity dates. The main purpose of the
above facilities is to finance the Group's operations.
As part of the bank borrowing facility the Group needs to meet
certain covenants every six months. There were no breaches of
covenants during the year. The covenant tests required are net bank
debt: EBITDA, interest cover, debt service cover and capital
expenditure.
The revolving credit bank facility available for drawdown is
GBP55.0 million plus a further GBP35.0 million accordion facility
(2020: GBP55.0 million plus a further GBP35.0 million accordion).
At the period end date, the facility utilised was GBP22.4 million
(2020: GBP36.2 million), giving GBP32.6 million (2020: GBP18.8
million) headroom plus a further GBP35.0 million (2020: GBP35.0
million) accordion.
10. Analysis of Net Bank Debt
The table below is presented to demonstrate total debt as defined
by our banking facility agreement. This excludes the lease liabilities
created on transition to IFRS 16 for leases treated as operating
leases under IAS 17.
At year Cashflow At year
ended 27 GBP000 ended 26
June 2020 June 2021
GBP000 GBP000
Cash and cash equivalents 10,173 (650) 9,523
Debt due after one year (36,184) 13,753 (22,431)
Hire purchase obligations
due within one year (247) 119 (128)
Hire purchase obligations
due after one year (225) 133 (92)
------------------------------------ -------------- ------------ -------------
Total net bank debt (26,483) 13,355 (13,128)
------------------------------------ -------------- ------------ -------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR EAXNNFLKFEFA
(END) Dow Jones Newswires
September 20, 2021 02:00 ET (06:00 GMT)
Finsbury Food (LSE:FIF)
Historical Stock Chart
From Mar 2024 to Apr 2024
Finsbury Food (LSE:FIF)
Historical Stock Chart
From Apr 2023 to Apr 2024