TIDMCRAW
RNS Number : 4868F
Crawshaw Group PLC
27 April 2011
Crawshaw Group PLC
Final Results
Crawshaw Group PLC ("the Company"), the meat focussed retailer,
today reports its audited results for the year ended 31(st)
January, 2011.
Results highlights for the year to 31(st) January 2011.
-- Profit before tax up 194% to GBP0.6m (2010: GBP0.2m)
-- Sales GBP19.1m (2010: GBP19.0m)
-- EBITDA up 25% to GBP1.0m (2010: GBP0.8m)
-- Cash generated by operating activities up 83% to GBP1.1m
(2010: GBP0.6m)
-- Net debt reduced to GBP0.5m (2010: GBP0.9m)
-- Cash margin up 2% and overheads down 3% over previous
year
-- Like for like sales much improved trend versus prior year -
shops up 1%; down 1% overall due to reduced footfall at market
locations (2010: down 8%)
-- No new stores opened during year, but one opened since year
end
For further information, please
contact:
Crawshaw Group PLC 01709 369 602
Lynda Sherratt
WH Ireland Limited (Nominated
Adviser)
Robin Gwyn 0161 832 2174
Chairman's Statement
Sales and margin
Overall sales were ahead of the previous year at GBP19.1m (2010:
GBP19.0m). This includes our 15 retail format stores, 5 market
formats, and our wholesale business.
Like for like sales were down overall by 1% representing a much
improved performance compared with an 8% fall in the previous year.
We reported improving trends at the half year resulting in a -4%
like for like after 6 months. Sales continued to improve throughout
the second half resulting in the -1% we are now reporting.
Within that result, our 15 High Street format stores are key to
our future, and they produced a like for like increase of 1%. The 5
market format locations, where like for like's were down 6% will be
re-located as opportunities arise. Wholesale sales are a small
element of our business (6% of sales) and generate lower gross
margins.
Whilst the sales result was much improved, it would have been
better had we not suffered the poor weather conditions before
Christmas. Having lost almost a week's sales due to the extreme
snowfall, we were unable to make up the shortfall as our customers
generally buy for immediate consumption.
Gross margin strengthened to 43.6% (2010: 43.0%) helping cash
margin to increase by 2% to GBP8.3m (2010: GBP8.2m)
Costs
Overheads have fallen 2.8% to GBP7.7m (2010 : GBP7.9m) in the
year despite rising fuel costs, improvements to our IT
infrastructure and increased maintenance expenditure as our estate
grows.
Staff related costs have fallen in real terms as we continue to
improve our operational efficiency. Administrative and property
expenses are being negotiated downwards as they come up for renewal
and other costs are regularly reviewed across all our units as well
as centrally.
Profit
Given the improvements in sales, margin and overhead costs,
operating profit strengthened to GBP0.6m (2010: GBP0.3m) before
exceptional costs.
Profit before tax for the year is up 194% at GBP0.6m (2010 :
GBP0.2m). Profit before tax and operating profit are reported at
the same level this year as there are no exceptional costs (2010 :
GBP0.1m) and interest charges have fallen in line with our debt
requirements.
No dividend is proposed.
Cash
I am very pleased to say that in the year we generated GBP1.1m
(2010: GBP0.6m) of cash from operating activities. Cash has been
utilised on capital projects GBP0.7m (shops & vehicles) and on
the repayment of loans GBP0.5m. Cash balances at the end of the
reporting period are GBP0.7m (2010: GBP0.8m).
Net debt has reduced from GBP0.9m reported in January 2010 to
GBP0.5m in January 2011.
New stores
As previously reported, in 2009 we opened 7 new stores in
various sizes and formats. Following on from my comments last year,
the 2 new larger formats continue to show the best performance on
all measures - sales per sq ft, gross margin, return on capital and
contribution.
The capital outlay for this format is approximately GBP0.4m, and
we would expect contribution levels to reach full payback within 2
to 3 years.
With this template in mind, since the year end, we have opened a
new larger format store in the Westfield Centre, Derby. The store
started trading well but it is too soon to fully evaluate the
likely returns.
It is our intention to seek further sites once an ongoing
trading pattern at the Derby store has been established.
We have also experimented with a very small mobile format to
serve different local communities each day of the week. It's very
early days but we feel the concept certainly has potential for
expansion.
Outlook
In recent weeks there has been evidence to suggest that the
retail trading climate has become more difficult. Whilst footfall
has held up well, customers are becoming more interested in lower
priced products. This, coupled with the fact that meat prices are
continuing to rise, leads us to be cautious about the outlook for
the year ahead.
Richard Rose
Chairman
26(th) April, 2011
Directors' report
Principal Activity
The principal activity of the Group is the operation of a chain
of meat focused retail food stores. The Group has two distribution
centres in Grimsby and Rotherham, plus 20 retail locations across
Yorkshire, Lincolnshire and Nottinghamshire.
Business Review
Up to 31 January 2011 Crawshaw Group plc has completed two full
years of trading as an AIM listed plc.
The Company's principal subsidiary, Crawshaw Butchers Limited,
which operates the primary business of the Group, traded profitably
such that the Group reported an operating profit before one off
exceptional costs of GBP638,935 (2010: GBP318,231) on turnover of
GBP19,062,928 (2010: GBP18,953,855).
Exceptional items were not incurred in the year to 31 January,
2011 however, there was an exceptional item in the prior year ended
31 January, 2010. This related to a loss of office payment plus
associated costs to our outgoing Finance Director, Andrew
Richardson and totalled GBP86,855. Profit before tax for the year
is GBP569,487 (2010 : GBP193,430) and the earnings per share for
the period are 0.720p (2010 : 0.409p).
The extreme weather conditions during December 2010 did affect
our year end sales performance. Our customers buy for immediate
consumption and therefore if they cannot get to the shops those
sales are lost. However, despite this we are reporting much
improved trends in sales performance. Like for like sales in the
year were down overall by 1% (2010: -8%), and within this we have
seen some excellent performances from our shops with like for like
sales improving by 1% (2010: -6%).
We continue to focus on "in store" customer service and during
the year we have further invested in staff training programs on and
off site. Added to this we regularly use sales promotions/offers to
remind customers of the quality and the value of our products. As a
result customer loyalty remains very high and this has undoubtedly
contributed to our ability to maintain footfall across our
estate.
Gross margin strengthened to 43.6% (2010: 43.0%) helping cash
margin to increase by 2% to GBP8,317,306 (2010: GBP8,150,081).
A new store was opened in Derby in February 2011. We have now
opened 8 new stores in varying sizes since July 2008 and of these
stores, we have agreed as a Board to roll out the larger format
stores as the returns on investment are greater than those
delivered from smaller stores.
Overheads have fallen 3% to GBP7,704,323 (2010 : GBP7,926,235)
in the year despite rising fuel costs, improvements in our IT
infrastructure and increased maintenance expenditure as our estate
grows.
Staff related costs have fallen in real terms as we continue to
improve our operational efficiency. Administrative and property
expenses are being negotiated downwards as they come up for renewal
and other costs are regularly reviewed across all our units as well
as centrally.
Total comparable sales for the first 10 weeks of the current
year are running at the same level as last year.
Balance sheet position
At our reporting date, the Group had a cash balance of
approximately GBP0.7m, total interest bearing loans and borrowings
of approximately GBP1.2m and total assets of GBP14m.
Cash has been utilised on the opening of a new retail outlet in
Derby plus other small capital projects and on the repayment of
debt. As a result the debt position as at 31(st) January, 2011 was
approximately GBP1.2 million consisting of the total outstanding
revolving credit facility of GBP0.4m and GBP0.8m related to
mortgages secured on the Group's distribution centre in Grimsby and
a store in Hull. Taking into account cash balances the net debt
position is reported as GBP0.5m (2010: GBP0.9m).
In total GBP1.2m of cash has been utilised in the year on
capital expenditure (GBP0.7m) and partial repayment of the
revolving credit facility (GBP0.5m).These requirements have been
met through cash generated from operations (GBP1.1m) and a
reduction in cash balances held (GBP0.1m).
In addition to the existing property mortgage loan arrangements,
a GBP0.5m revolving credit facility with RBS expires 30(th) June,
2011. It is not envisaged that the company will need to renew this
facility at this time.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
-----------------------------------------------
FOR THE YEAR ENDED 31 JANUARY 2011
-----------------------------------------------
Year ended Year ended
---------------------------------------- ----- ------------- -------------
31 January 31 January
---------------------------------------- ----- ------------- -------------
2011 2010
---------------------------------------- ----- ------------- -------------
Note GBP GBP
---------------------------------------- ----- ------------- -------------
Revenue 19,062,928 18,953,855
---------------------------------------- ----- ------------- -------------
Cost of sales (10,745,622) (10,803,774)
---------------------------------------- ----- ------------- -------------
Gross profit 8,317,306 8,150,081
---------------------------------------- ----- ------------- -------------
Other operating income 3 10,952 7,530
---------------------------------------- ----- ------------- -------------
Administrative expenses (7,689,323) (7,926,235)
---------------------------------------- ----- ------------- -------------
Operating profit before one-off costs 638,935 318,231
---------------------------------------- ----- ------------- -------------
Exceptional Items 2 - (86,855)
---------------------------------------- ----- ------------- -------------
Operating profit 638,935 231,376
---------------------------------------- ----- ------------- -------------
Finance income 7 83 524
---------------------------------------- ----- ------------- -------------
Finance expenses 7 (34,531) (63,931)
---------------------------------------- ----- ------------- -------------
Net finance expense (34,448) (63,407)
---------------------------------------- ----- ------------- -------------
Share of (loss)/ profit of equity
accounted investees (net of tax) (35,000) 25,461
---------------------------------------- ----- ------------- -------------
Profit before income tax 569,487 193,430
---------------------------------------- ----- ------------- -------------
Income tax (expense)/credit 8 (152,939) 34,253
---------------------------------------- ----- ------------- -------------
Total recognised income for the period 416,548 227,683
---------------------------------------- ----- ------------- -------------
Attributable to:
---------------------------------------- ----- ------------- -------------
Equity holders of the Company 416,548 227,683
---------------------------------------- ----- ------------- -------------
Basic profit per ordinary share 0.720p 0.409p
---------------------------------------- ----- ------------- -------------
Diluted profit per ordinary share 0.720p 0.401p
---------------------------------------- ----- ------------- -------------
The Company is taking advantage of the exemption in section 408
of the Companies Act 2006
not to present its individual income statement.
Balance Sheets
At 31 January 2011
--------------------
Group Group Company Company
--------------------- ------ ------------ ------------ ------------ -------------
Note 2011 2010 2011 2010
--------------------- ------ ------------ ------------ ------------ -------------
ASSETS GBP GBP GBP GBP
--------------------- ------ ------------ ------------ ------------ -------------
Non Current Assets
--------------------- ------ ------------ ------------ ------------ -------------
Property, plant
and equipment 10 4,823,442 4,491,872 - -
--------------------- ------ ------------ ------------ ------------ -------------
Intangible assets
- goodwill and
related Acquisition
intangibles 11 7,650,724 7,685,404 - -
--------------------- ------ ------------ ------------ ------------ -------------
Investment in equity
accounted investees 12 100,207 135,207 - -
--------------------- ------ ------------ ------------ ------------ -------------
Investments in
Subsidiaries 13 11,700,000 11,700,000
--------------------- ------ ------------ ------------ ------------ -------------
Total Non Current
Assets 12,574,373 12,312,483 11,700,000 11,700,000
--------------------- ------ ------------ ------------ ------------ -------------
Current Assets
--------------------- ------ ------------ ------------ ------------ -------------
Inventories 15 361,647 484,998 - -
--------------------- ------ ------------ ------------ ------------ -------------
Trade and other
receivables 16 371,702 409,429 6,749,969 6,650,487
--------------------- ------ ------------ ------------ ------------ -------------
Cash and cash
equivalents 723,616 800,381 - -
--------------------- ------ ------------ ------------ ------------ -------------
Total Current Assets 1,456,965 1,694,808 6,749,969 6,650,487
--------------------- ------ ------------ ------------ ------------ -------------
Total Assets 14,031,338 14,007,291 18,449,969 18,350,487
--------------------- ------ ------------ ------------ ------------ -------------
SHAREHOLDERS' EQUITY
--------------------- ------ ------------ ------------ ------------ -------------
Share capital 19 2,890,940 2,890,940 2,890,940 2,890,940
--------------------- ------ ------------ ------------ ------------ -------------
Share premium 19 6,317,618 6,317,618 6,317,618 6,317,618
--------------------- ------ ------------ ------------ ------------ -------------
Reverse acquisition
reserve 19 446,563 446,563 - -
--------------------- ------ ------------ ------------ ------------ -------------
Capital contribution
reserve 19 149,311 149,311 - -
--------------------- ------ ------------ ------------ ------------ -------------
Merger Reserve 19 - 10,140,000 10,140,000
--------------------- ------ ------------ ------------ ------------ -------------
Retained earnings 19 123,892 (312,379) (900,176) (1,001,655)
--------------------- ------ ------------ ------------ ------------ -------------
Total Shareholders'
Equity 9,928,324 9,492,053 18,448,382 18,346,903
--------------------- ------ ------------ ------------ ------------ -------------
LIABILITIES
--------------------- ------ ------------ ------------ ------------ -------------
Non Current
Liabilities
--------------------- ------ ------------ ------------ ------------ -------------
Other payables 17 138,742 122,375 - -
--------------------- ------ ------------ ------------ ------------ -------------
Interest bearing
loans and
borrowings 20 1,240,000 1,740,000 - -
--------------------- ------ ------------ ------------ ------------ -------------
Deferred tax
liabilities 14 486,946 485,342 - -
--------------------- ------ ------------ ------------ ------------ -------------
Total Non Current
Liabilities 1,865,688 2,347,717 - -
--------------------- ------ ------------ ------------ ------------ -------------
Current Liabilities
--------------------- ------ ------------ ------------ ------------ -------------
Trade and other
payables 17 2,237,326 2,167,521 1,587 3,584
--------------------- ------ ------------ ------------ ------------ -------------
Total Current
Liabilities 2,237,326 2,167,521 1,587 3,584
--------------------- ------ ------------ ------------ ------------ -------------
Total Liabilities 4,103,014 4,515,238 1,587 3,584
--------------------- ------ ------------ ------------ ------------ -------------
Total Equity and
Liabilities 14,031,338 14,007,291 18,449,969 18,350,487
--------------------- ------ ------------ ------------ ------------ -------------
These financial statements were approved by the Board of Directors on
26(th) April 2011 and
were signed on its behalf by:
Lynda Sherratt
Finance Director
Company registered number: 04755803
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
-------------------------------------------------------------------------------
-----
Reverse Capital
Share Share Acquisition Cont'n Retained To
tal
Capital Premium Reserve Reserve Earnings Eq
uity
GBP GBP GBP GBP GBP G
BP
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Balance at
1 February
2009 2,334,009 4,981,049 446,563 149,311 (613,232) 7,29
7,700
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Profit for
the
Period - - - - 227,683 22
7,683
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Share Based
Payments - - - - 73,170 7
3,170
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Loan note
conversion 294,118 705,882 - - - 1,00
0,000
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Issue of
shares 262,813 630,687 - - - 89
3,500
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Balance at
31 January
2010 2,890,940 6,317,618 446,563 149,311 (312,379) 9,49
2,053
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Balance at
1 February
2010 2,890,940 6,317,618 446,563 149,311 (312,379) 9,49
2,053
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Profit for
the
period - - - - 416,548 41
6,548
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Share based
payment - - - - 19,723 1
9,723
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Balance at
31 January
2011 2,890,940 6,317,618 446,563 149,311 123,892 9,92
8,324
------------ ---------- ---------- ------------ -------- ---------- -----
-----
Cash Flow Statements
For the period ended 31 January 2011
--------------------------------------
Group Group Company Company
--------------- ---------- ------------ --------- ------------
Year Year
ended Year ended ended Year ended
--------------- ---------- ------------ --------- ------------
31 31
January 31 January January 31 January
2011 2010 2011 2010
--------------- ---------- ------------ --------- ------------
Cash flows
from operating
activities GBP GBP GBP GBP
--------------- ---------- ------------ --------- ------------
Profit for the
period 416,548 227,683 101,479 57,937
--------------- ---------- ------------ --------- ------------
Adjustments
for:
--------------- ---------- ------------ --------- ------------
Share based
payments
charge 19,723 73,170 - -
--------------- ---------- ------------ --------- ------------
Depreciation
and
amortisation 377,588 384,979 - -
--------------- ---------- ------------ --------- ------------
Loss on sale
of property,
plant and
equipment 5,278 11,845 - -
--------------- ---------- ------------ --------- ------------
Net financial
charges 34,448 63,407 - (287,712)
--------------- ---------- ------------ --------- ------------
Share of
loss/(profit)
of equity
accounted
investees
(net of tax) 35,000 (25,461) - -
--------------- ---------- ------------ --------- ------------
Taxation 152,939 (34,253) - (37,477)
--------------- ---------- ------------ --------- ------------
Operating
cashflow
before
movements in
working
capital 1,041,524 701,370 101,479 (267,252)
--------------- ---------- ------------ --------- ------------
Movement in
trade and
other
receivables 37,727 100,460 - (1,880,044)
--------------- ---------- ------------ --------- ------------
Movement in
trade and
other
payables (65,163) (187,180) (1,997) (33,916)
--------------- ---------- ------------ --------- ------------
Movement in
inventories 123,351 (23,477) - -
--------------- ---------- ------------ --------- ------------
Net cash (used
in)/
generated
from
operating
activities 1,137,439 591,173 99,482 (2,181,212)
--------------- ---------- ------------ --------- ------------
Cash flows
from investing
activities
--------------- ---------- ------------ --------- ------------
Purchase of
property,
plant and
equipment (690,255) (644,863) - -
--------------- ---------- ------------ --------- ------------
Proceeds from
sale of
property,
plant &
equipment 10,500 22,450 - -
--------------- ---------- ------------ --------- ------------
Interest
received 83 524 - -
--------------- ---------- ------------ --------- ------------
Interest paid (34,531) (63,931) - -
--------------- ---------- ------------ --------- ------------
Net cash (used
in)/
generated by
investing
activities (714,203) (685,820) - -
--------------- ---------- ------------ --------- ------------
Cash flows
from financing
activities
--------------- ---------- ------------ --------- ------------
Issue of
Ordinary
Shares (net
of issue
costs) - 893,500 - 893,500
--------------- ---------- ------------ --------- ------------
Repayment of
loans (500,000) (1,462,018) - -
--------------- ---------- ------------ --------- ------------
Movements in
amounts owed
by group
companies - - (99,482) 1,287,712
--------------- ---------- ------------ --------- ------------
Net cash (used
in)/
generated
from
financing
activities (500,000) (568,518) (99,482) 2,181,812
--------------- ---------- ------------ --------- ------------
Net change in
cash and cash
equivalents (76,764) (663,165) - -
--------------- ---------- ------------ --------- ------------
Cash and cash
equivalents
at start of
period 800,380 1,463,545 - -
--------------- ---------- ------------ --------- ------------
Cash and cash
equivalents
at end of
period 723,616 800,380 - -
--------------- ---------- ------------ --------- ------------
Notes to the financial statements
(forming part of the financial statements)
1. ACCOUNTING POLICIES
Crawshaw Group Plc (the "Company") is a company incorporated and
domiciled in the UK.
The group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group") and
equity account the Group's interest in jointly controlled entities.
The parent company financial statements present information about
the Company as a separate entity and not about its group.
Both the parent company financial statements and the group
financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting
Standards as adopted by the EU ("Adopted IFRSs"). On publishing the
parent company financial statements here together with the group
financial statements, the Company is taking advantage of the
exemption in s408 of the Companies Act 2006 not to present its
individual income statement and related notes that form a part of
these approved financial statements.
The following new and revised IFRSs have been adopted in these
consolidated financial statements. The application of these new and
revised IFRSs has not had any material impact on the amounts
reported for the current and prior years but may affect the
accounting for future transactions or arrangements. Other new
standards and interpretations have no significant impact on the
Group.
-- IFRS 2 Group Cash-settled Share-based Payment Transactions.
The amendments clarify the scope of IFRS 2, as well as the
accounting for group cash-settled share-based payment transactions
in the separate (or individual) financial statements of an entity
receiving the goods or services when another group entity or
shareholder has the obligation to settle the award.
-- IFRS 3 (revised) Business Combinations requires some
significant changes to the way business combinations are accounted
for. All costs associated with business combinations are expensed
directly to the statement of comprehensive income. Additionally any
changes to contingent consideration classified as debt must now be
dealt with through the Income Statement subsequent to
acquisition.
-- Improvements to IFRSs: in April 2009 the International
Accounting Standards Board issued its second omnibus of amendments
to its standards, primarily with a view to removing inconsistencies
and clarifying wording. The adoption of these amendments, which are
effective from 1 January 2010, did not have any impact on the
reporting of the financial position or performance of the
Group.
The Group has not applied the following new and revised IFRSs
and IFRICs that are EU endorsed but are not yet effective:
-- IAS 24 (revised in 2009) - Related Party Disclosures.
Effective for annual periods beginning on or after 1 January
2011.
-- IFRIC 19 - Extinguishing Financial Liabilities with Equity
Instruments. Effective for annual periods beginning on or after 1
July 2010.
The Group is currently considering the implications of these
standards and interpretations. They are not expected to have a
material impact on the Group's financial statements.
BASIS OF CONSOLIDATION
Subsidiaries
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power to govern the financial and
operating policies of an entity so as to obtain benefits from its
activities. In assessing control, the Group takes into
consideration potential voting rights that are currently
exercisable. The acquisition date is the date on which control is
transferred to the acquirer. The financial statements of
subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control
ceases.
Jointly controlled entities are those entities over whose
activities the Group has joint control, established by contractual
agreement and requiring the venturers' unanimous consent for
strategic financial and operating decisions. Jointly controlled
entities are accounted for using the equity method (equity
accounted investees) and are initially recognised at cost. The
Group's investment includes goodwill identified on acquisition, net
of any accumulated impairment losses. The consolidated financial
statements include the Group's share of the total comprehensive
income and equity movements of equity accounted investees, from the
date that joint control commences until the date that joint control
ceases. When the Group's share of losses exceeds its interest in an
equity accounted investee, the Group's carrying amount is reduced
to nil and recognition of further losses is discontinued except to
the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of an investee.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
consolidated financial statements.
GOING CONCERN
The company's business activities, together with the factors
likely to affect it future development, performance and position
are set out in the Business Review on pages 6 to 7.In addition ,the
notes to the financial statements include the company's objectives,
policies and processes for managing its capital and its exposures
to credit and liquidity risk.
The company has cash resources in excess of the amounts due for
repayment on cessation of the revolving credit facility on 30(th)
June 2011.As part of its normal business practice, budgets, cash
flow forecasts and longer term financial projections are prepared
and in reviewing this information, the Directors are satisfied that
the company has adequate resources to enable it to continue in
business for the forseeable future. As a consequence, the Directors
believe that the company is well placed to manage its business
risks successfully despite the current uncertain economic
outlook.
The Directors have a reasonable expectation that the company has
adequate resources to continue in operational existence for the
forseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the annual financial
statements.
CLASSIFICATION OF FINANCIAL INSTRUMENTS ISSUED BY THE GROUP
In applying policies consistent with IAS 32, financial
instruments issued by the Group are treated as equity only to the
extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Group's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Group's own
equity instruments or is a derivative that will be settled by the
Group's exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Group's own shares, the
amounts presented in this financial information for called up share
capital and share premium account exclude amounts in relation to
those shares.
Preference share capital is classified as equity if it is
non-redeemable, or redeemable only at the Company's option, and any
dividends are discretionary. Dividends thereon are recognised as
distributions within equity upon approval by the Group's
shareholders.
Preference share capital is classified as a liability if it is
redeemable on a specific date or at the option of the shareholders,
or if dividend payments are not discretionary. Dividends thereon
are recognised as interest expense in profit or loss as
accrued.
Finance payments associated with financial liabilities are dealt
with as part of finance expenses. Finance payments associated with
financial instruments that are classified in equity are treated as
distributions and are recorded directly in equity.
NON-DERIVATIVE FINANCIAL INSTRUMENTS
Non-derivative financial instruments comprise investments in
equity securities, trade and other receivables, cash and cash
equivalents and trade and other payables.
Trade and other receivables are recognised at stated cost less
impairment losses. It is the Company's policy to review trade and
other receivable balances for evidence of impairment at each
reporting date. Any receivables which give significant cause for
concern are written down to the best estimate of the recoverable
amount.
Cash and cash equivalents comprise cash-in-hand and
cash-at-bank.
Trade and other payables are recognised at stated cost.
ASSOCIATES AND JOINTLY CONTROLLED ENTITIES (equity accounted
investees)
Associates are those entities in which the Group has significant
influence, but not control, over the financial and operating
policies. Significant influence is presumed to exist when the Group
holds between 20 and 50 percent of the voting power of another
entity. Joint ventures are those entities over whose activities the
Group has joint control, established by contractual agreement and
requiring unanimous consent for strategic financial and operating
decisions.
Associates and jointly controlled entities are accounted for
using the equity method (equity accounted investees) and are
initially recognised at cost. The Group's investment includes
goodwill identified on acquisition, net of any accumulated
impairment losses. The consolidated financial statements include
the Group's share of the income and expenses and equity movements
of equity accounted investees, after adjustments to align the
accounting policies with those of the Group, from the date that
significant influence or joint control commences until the date
that significant influence or joint control ceases. When the
Group's share of losses exceeds its interest in an equity accounted
investee, the carrying amount of that interest (including any
long-term investments) is reduced to nil and the recognition of
further losses is discontinued except to the extent that the Group
has an obligation or has made payments on behalf of the
investee.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses.
Depreciation is charged to the income statement on a
straight-line basis over the estimateduseful lives of each part of
an item of property, plant and equipment. Residual values of
property, plant and equipment is assumed to be nil. Land is not
depreciated. The estimated useful lives are as follows:
-- Freehold property 2%
-- Leasehold buildings in accordance with the lease term
-- Leasehold improvements in accordance with the lease term
-- Plant, equipment and vehicles 10-25% on reducing balance
INTANGIBLE ASSETS AND GOODWILL
Goodwill represents amounts arising on acquisition of
businesses. In respect of business acquisitions that have occurred
since 11 December 2006, goodwill represents the difference between
the cost of the acquisition and the fair value of the net
identifiable assets acquired. Identifiable intangibles are those
which can be sold separately or which arise from legal rights
regardless of whether those rights are separable.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is not
amortised but is tested annually for impairment. Any impairment is
then recognised immediately in profit or loss and is not
subsequently reversed.
Intangible assets that are acquired by the Group, which have
finite useful lives, are measured at cost less accumulated
amortisation and accumulated impairment losses.
IFRS 1 grants certain exemptions from the full requirements of
Adopted IFRSs in the transition period. The Company elected not to
restate business combinations in Crawshaw Butchers Limited that
took place prior to 1 February 2006. In respect of acquisitions
prior to 1 February 2006, goodwill is included at 1 February 2006
on the basis of its deemed cost, which represents the amount
recorded under UK GAAP which was broadly comparable save that only
separable intangibles were recognised and goodwill was
amortised.
AMORTISATION
Amortisation is recognised in the statement of comprehensive
income on a straight-line basis over the estimated useful lives of
intangible assets, other than goodwill, from the date that they are
available for use. The estimated useful lives for the current and
comparative periods are as follows:
-- Brand 20 years
IMPAIRMENT
The carrying amounts of the Group's assets are reviewed at each
balance sheet date to determine whether there is any indication of
impairment. If any such indication exists, the asset's recoverable
amount is estimated.
For goodwill and intangible assets that are not yet available
for use, the recoverable amount is estimated at each balance sheet
date.
An impairment loss is recognised whenever the carrying amount of
an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the statement of
comprehensive income.
Impairment losses recognised in respect of cash-generating units
are allocated first to reduce the carrying amount of any goodwill
allocated to cash-generating units and then to reduce the carrying
amount of the other assets in the unit on a pro rata basis. A cash
generating unit is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets.
Calculation of recoverable amount
The recoverable amount of other assets is the greater of their
fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
Reversals of impairment
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed when
there is an indication that the impairment loss may no longer exist
and there has been a change in the estimates used to determine the
recoverable amount.
An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
PROVISIONS
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation. If the effect is
material, provisions are determined by discounting the expected,
risk adjusted, future cash flows at a pre-tax risk-free rate.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised at their fair value
and thereafter at amortised cost less impairment charges.
INVENTORIES
Inventories are stated at the lower of cost and net realisable
value, after making due allowance for obsolete and slow moving
items. Cost comprises purchase price. Net realisable value is
estimated selling price in the ordinary course of business, less
the estimated costs of completion and selling expenses.
Inventories are primarily goods for resale.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash-in-hand and cash-at
bank. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
statement of cash flows.
EMPLOYEE BENEFITS
Defined contribution plans
The Group operates a defined contribution pension scheme. The
assets of the scheme are held separately from those of the Group in
an independently administered fund. Obligations for contributions
to defined contribution pension plans are recognised as an expense
in the income statement as incurred.
Short-term benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A provision is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
REVENUE
Revenue is derived from retail butcher activities, stated after
trade discounts, VAT and any other sales taxes. Revenue from the
sale of goods is recognised in the statement of comprehensive
income when the significant risks and rewards of ownership have
been transferred to the buyer. Where the Group sells to
distributors, revenue from the sale of goods is recognised where
there are no further obligations on the Group and when the
associated economic benefits are due to the Group and the turnover
can be reliably measured.
EXPENSES
Operating lease payments
Payments made under operating leases are recognised in the
statement of comprehensive income on a straight-line basis over the
term of the lease. Lease incentives received are recognised in the
income statement as an integral part of the total lease
expense.
Net financing costs
Net financing costs comprise interest payable, finance charges
on shares classified as liabilities, interest receivable on funds
invested and dividend income.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Dividend
income is recognised in the income statement on the date the
entity's right to receive payments is established.
Borrowing costs
In the current year borrowing costs are expensed in the
consolidated statement of comprehensive income as incurred.
TAXATION
Tax on the profit or loss for the period comprises current and
deferred tax. Tax is recognised in the statement of comprehensive
income except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
for the period, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in
respect of previous periods.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised.
BANK LOANS, OVERDRAFTS AND LOAN NOTES
Interest-bearing bank loans, overdrafts and loan notes are
recorded at the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals
basis in profit or loss using the effective interest rate method
and are added to the carrying amount of the instrument to the
extent that they are not settled in the period in which they
arise.
SEGMENTAL REPORTING
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. Operating
segments' operating results are reviewed regularly by the Group's
Managing Director to make decisions about resources to be allocated
to the segment and assess its performance, and for which discrete
financial information is available. The Directors consider each
location to be a separate operating segment. The Directors have
applied the provisions within IFRS 8 for aggregation of operating
segments with similar risks and markets, to have one reportable
segment. The Group's business operations are conducted exclusively
in the UK so geographical segment reporting is not required.
SIGNIFICANT JUDGEMENTS AND ESTIMATES
The preparation of the financial information in conformity with
IFRS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The
estimates and underlying assumptions are reviewed on an ongoing
basis.
The estimates associated with the assumptions are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis for making judgements about the carrying values of assets
and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to estimates are recognised in the period
in which the estimate is revised if the revision only affects that
period, or in the period of revision and future periods if the
revision affects both current and future periods.
The key sources of estimation uncertainty at the balance sheet
date are:
GOODWILL
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash-generating unit(s) to which
goodwill has been allocated. The value in use calculation requires
the entity to estimate the future cash flows expected to arise from
the cash-generating unit and a suitable discount rate in order to
calculate present value.
The carrying amount of goodwill at the balance sheet date was
GBP7.7 million. Details of the present value calculation are
provided in note 11.
BRAND INTANGIBLES
The royalty relief approach is considered the most appropriate
method to determine the value of the brand. A royalty percentage of
1% has been applied to revenue streams for the twenty years ended
31 January 2028 from the branch network carrying the Crawshaw
brand. These have then been discounted at 15.7% to arrive at an
initial carrying value of GBP693,558. This will be amortised over
the finite life of twenty years, with the amortisation charge being
included within administrative expenses in the statement of
comprehensive income.
2. EXCEPTIONAL ITEMS
Exceptional costs in the period relate
to
------------------------------------------------ ------ --------
2011 2010
------------------------------------------------ ------ --------
GBP GBP
------------------------------------------------ ------ --------
Directors Loss of Office - 86,855
------------------------------------------------ ------ --------
A. Richardson resigned as a director of the Company on 8(th)
May 2009, compensation for loss of office and associated
legal costs total GBP86,855.
------------------------------------------------------------------
3. OTHER OPERATING INCOME
2011 2010
----------------------------------- ------------ ------------
GBP GBP
----------------------------------- ------------ ------------
RGV management charge 7,000 4,000
----------------------------------- ------------ ------------
Other 3,952 3,530
----------------------------------- ------------ ------------
TOTAL 10,952 7,530
----------------------------------- ------------ ------------
The Group charges RGV Refrigeration a management charge each
period for administration services. The Group has investment in RGV
Refrigeration, which is described further in note 12.
4. EXPENSES AND AUDITORS REMUNERATION
Included in operating profit are the following:
2011 2010
GBP GBP
Depreciation of property, plant and equipment
(owned) 342,908 349,873
Amortisation of intangible assets (note
11) 34,680 34,680
Loss/(profit) on sale of property, plant
and equipment 5,278 11,845
Auditors' remuneration:
2011 2010
GBP GBP
Audit of these financial statements 12,500 12,500
Amounts receivable by the auditors and their
associates in respect of:
Audit of financial statements of subsidiaries
pursuant to legislation 18,500 12,500
Other services relating to taxation 6,500 19,500
Advice relating to group structure 5,500 -
Total auditors' remuneration 43,000 44,500
5. STAFF NUMBERS AND COSTS
The average number of persons employed by the Company (including
directors) during the period, analysed by category, was as
follows:
Number of employees
2011 2010
Key Management 5 5
Other 226 222
231 227
The aggregate payroll costs of these persons were as
follows:
2011 2010
GBP GBP
Wages and salaries 4,038,381 4,110,605
Social security costs 342,059 335,836
Other pension costs 75,981 91,109
4,456,421 4,537,550
6. KEY MANAGEMENT COMPENSATION
2011 2010
GBP GBP
Wages and salaries 274,382 382,625
Company contributions to money purchase
pension plans 74,580 75,119
The Group considers key management personnel as defined in IAS24
'Related Party Disclosures' to be the Directors of the Group.
Detailed disclosures of individual remuneration, pension
entitlements and share options, for those directors who served
during the year, are given in the Report of the Remuneration
Committee, these numbers have been audited. The aggregate of
emoluments and amounts receivable under long term incentive schemes
of the highest paid director was GBP59,486 (2010: GBP60,202),and
company pension contributions of GBP54,580 (2010: GBP52,996) were
made to a money purchase scheme on his behalf. See note 18 for
further details.
Number of directors
2011 2010
Retirement benefits are accruing to the
following number of directors under:
Money purchase schemes 2 2
7. FINANCE AND INCOME EXPENSE
2011 2010
GBP GBP
Bank interest 83 524
Financial income 83 524
Bank interest 34,531 46,226
Loan note interest - 17,705
Financial expenses 34,531 63,931
8. INCOME TAX EXPENSE
Recognised in the income statement 2011 2010
------------------------------------------------ -------- ---------
The income tax expense is based on the
estimated effective rate of taxation
on trading for the period and represents: GBP GBP
------------------------------------------------ -------- ---------
Current tax 131,784 -
------------------------------------------------ -------- ---------
Deferred tax:
------------------------------------------------ -------- ---------
Origination and reversal of timing differences 1,604 29,850
------------------------------------------------ -------- ---------
Adjustments for prior year 19,551 (64,103)
------------------------------------------------ -------- ---------
21,155 (34,253)
------------------------------------------------ -------- ---------
Income tax expense 152,939 (34,253)
------------------------------------------------ -------- ---------
Reconciliation of effective tax rate 2010 2010
----------------------------------------- --------- ---------
GBP GBP
----------------------------------------- --------- ---------
Profit/(Loss) for the period 416,548 227,683
----------------------------------------- --------- ---------
Total Tax Expense 152,939 (34,253)
----------------------------------------- --------- ---------
Profit/(Loss) excluding taxation 569,487 193,430
----------------------------------------- --------- ---------
Tax using UK Corporation tax rate of
28% 159,456 54,160
----------------------------------------- --------- ---------
Non-deductible expenses (2,717) 37,419
----------------------------------------- --------- ---------
Adjustment for prior years Corporation
Tax 19,551 (64,103)
----------------------------------------- --------- ---------
Adjustment for prior years Deferred Tax 22,939 -
----------------------------------------- --------- ---------
Deferred tax rate change to 27% from
28% (17,876) -
----------------------------------------- --------- ---------
Utilisation of tax losses (28,414) (61,729)
----------------------------------------- --------- ---------
Total tax (credit)/expense 152,939 (34,253)
----------------------------------------- --------- ---------
The Emergency Budget on 22 June 2010 announced that the UK
corporation tax rate will reduce from 28% to 24% over a period of 4
years from 2011. The first reduction in the UK corporation tax rate
from 28% to 27% was enacted on 27 July 2010 and will be effective
from 1 April 2011 and therefore deferred tax balances at 31 January
2011 include the impact of this rate reduction.
The Budget on 23 March 2011 announced further measures to reduce
the UK corporation tax rate to 23% by 2014, starting with an
additional reduction of 1% in the tax rate to 26% with effect from
1 April 2011. This has not been reflected in the figures as it was
not substantively enacted at the balance sheet date.
9. EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share is calculated by dividing the
earnings attributable to the ordinary shareholders by the weighted
average number of ordinary shares outstanding during the year of
57,818,801 (31/1/10: 55,686,461).
Diluted EPS is calculated by dividing the profit for the year
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue adjusted to assume conversion of
all potentially dilutive ordinary shares from the start of the year
giving a figure of 57,818,801 (31/1/10: 56,790,283).
The calculation of the basic and diluted earnings per share is
based on the following data:
2011 2010
-------------------------- -------- --------
GBP GBP
-------------------------- -------- --------
Earnings attributable to
shareholders 416,548 227,683
-------------------------- -------- --------
10. PROPERTY, PLANT AND EQUIPMENT
Land and Buildings
---------------- ------------- ------------------------ ---------- ----------
Plant,
equipment
Asset under Leasehold and
construction Freehold improvements vehicles Total
---------------- ------------- --------- ------------- ---------- ----------
Cost GBP GBP GBP GBP GBP
---------------- ------------- --------- ------------- ---------- ----------
Balance at 1
February
2010 - 732,691 2,812,833 1,525,331 5,070,855
---------------- ------------- --------- ------------- ---------- ----------
Additions at
cost 508,077 20,776 15,950 145,453 690,256
---------------- ------------- --------- ------------- ---------- ----------
Disposals - - - (42,280) (42,280)
---------------- ------------- --------- ------------- ---------- ----------
Balance at 31
January
2011 508,077 753,467 2,828,783 1,628,504 5,718,831
---------------- ------------- --------- ------------- ---------- ----------
Depreciation
and
impairment
---------------- ------------- --------- ------------- ---------- ----------
Balance at 1
February
2010 - 40,169 244,015 294,799 578,983
---------------- ------------- --------- ------------- ---------- ----------
Depreciation
charge for
the year 14,812 183,503 144,593 342,908
---------------- ------------- --------- ------------- ---------- ----------
Disposals - - - (26,502) (26,502)
---------------- ------------- --------- ------------- ---------- ----------
Balance at 31
January
2011 - 54,981 427,518 412,890 895,389
---------------- ------------- --------- ------------- ---------- ----------
Net book
value
---------------- ------------- --------- ------------- ---------- ----------
At 31 January
2010 - 692,522 2,568,818 1,230,532 4,491,872
---------------- ------------- --------- ------------- ---------- ----------
At 31 January
2011 508,077 698,486 2,401,265 1,215,614 4,823,442
---------------- ------------- --------- ------------- ---------- ----------
There are no items of property, plant and equipment in the
Company.
For details of security given over property, plant and equipment
see note 20.
PRIOR YEAR
Land and Buildings
---------------- ------------- ------------------------ ---------- ----------
Plant,
equipment
Asset under Leasehold and
construction Freehold improvements vehicles Total
---------------- ------------- --------- ------------- ---------- ----------
Cost GBP GBP GBP GBP GBP
---------------- ------------- --------- ------------- ---------- ----------
Balance at 1
February
2009 73,192 731,935 2,172,542 1,515,931 4,493,600
---------------- ------------- --------- ------------- ---------- ----------
Additions at
cost 510,194 756 56,905 76,582 644,437
---------------- ------------- --------- ------------- ---------- ----------
Disposals - - - (67,182) (67,182)
---------------- ------------- --------- ------------- ---------- ----------
Transfer (583,386) - 583,386 - -
---------------- ------------- --------- ------------- ---------- ----------
Balance at 31
January
2010 - 732,691 2,812,833 1,525,331 5,070,855
---------------- ------------- --------- ------------- ---------- ----------
Depreciation
and
impairment
---------------- ------------- --------- ------------- ---------- ----------
Balance at 1
February
2009 - 26,046 61,125 174,826 261,997
---------------- ------------- --------- ------------- ---------- ----------
Depreciation
charge for
the year - 14,123 182,890 152,860 349,873
---------------- ------------- --------- ------------- ---------- ----------
Disposals - - - (32,887) (32,887)
---------------- ------------- --------- ------------- ---------- ----------
Balance at 31
January
2010 - 40,169 244,015 294,799 578,983
---------------- ------------- --------- ------------- ---------- ----------
Net book
value
---------------- ------------- --------- ------------- ---------- ----------
At 31 January
2009 73,192 705,889 2,111,417 1,341,105 4,231,603
---------------- ------------- --------- ------------- ---------- ----------
At 31 January
2010 - 692,522 2,568,818 1,230,532 4,491,872
---------------- ------------- --------- ------------- ---------- ----------
11. INTANGIBLE ASSETS
Other Intangibles Goodwill Brand Total
------------------------ ------------------ ---------- -------- ----------
Group GBP GBP GBP GBP
------------------------ ------------------ ---------- -------- ----------
Cost or deemed cost
------------------------ ------------------ ---------- -------- ----------
At 1 February 2010 and
31 January 2011 214,247 7,088,657 693,558 7,996,462
------------------------ ------------------ ---------- -------- ----------
Amortisation and
impairment
------------------------ ------------------ ---------- -------- ----------
At 1 February 2010 214,247 - 96,811 311,058
------------------------ ------------------ ---------- -------- ----------
Amortisation charge for
the period - - 34,680 34,680
------------------------ ------------------ ---------- -------- ----------
Balance at 31 January
2010 214,247 - 131,491 345,738
------------------------ ------------------ ---------- -------- ----------
Net book value
------------------------ ------------------ ---------- -------- ----------
At 31 January 2011 - 7,088,657 562,067 7,650,724
------------------------ ------------------ ---------- -------- ----------
At 31 January 2010 - 7,088,657 596,747 7,685,404
------------------------ ------------------ ---------- -------- ----------
PRIOR YEAR
Other Intangibles Goodwill Brand Total
------------------------ ------------------ ---------- -------- ----------
Group GBP GBP GBP GBP
------------------------ ------------------ ---------- -------- ----------
Cost or deemed cost
------------------------ ------------------ ---------- -------- ----------
At 1 February 2009 and
31 January 2010 214,247 7,088,657 693,558 7,996,462
------------------------ ------------------ ---------- -------- ----------
Amortisation and
impairment
------------------------ ------------------ ---------- -------- ----------
At 1 February 2009 214,247 - 62,131 276,378
------------------------ ------------------ ---------- -------- ----------
Amortisation charge for
the period - - 34,680 34,680
------------------------ ------------------ ---------- -------- ----------
Balance at 31 January
2010 214,247 - 96,811 311,058
------------------------ ------------------ ---------- -------- ----------
Net book value
------------------------ ------------------ ---------- -------- ----------
At 31 January 2010 - 7,088,657 596,747 7,685,404
------------------------ ------------------ ---------- -------- ----------
At 31 January 2009 - 7,088,657 631,427 7,720,084
------------------------ ------------------ ---------- -------- ----------
There are no intangible assets within the Company.
Goodwill is tested for impairment annually.
Acquired brand values are calculated using the royalty relief
approach and are amortised over twenty years. The remaining
amortisation period is 16 years and 2 months.
The amortisation and impairment charge is recognised in the
following line items in the consolidated statement of comprehensive
income:
2011 2010
------------------------- ------- -------
GBP GBP
------------------------- ------- -------
Administrative expenses 34,680 34,680
------------------------- ------- -------
Impairment testing
Goodwill has been allocated to cash generating units or groups
of cash generating units as follows:
2011 2010
------------------------------ ---------- ----------
GBP GBP
------------------------------ ---------- ----------
Crawshaw Butchers Limited(at
acquisition) 7,088,657 7,088,657
------------------------------ ---------- ----------
The recoverable amount of Crawshaw Butchers Ltd at acquisition
has been calculated with reference to its value in use.The key
assumptions of this calculation are shown below:
2011 2010
---------------------------- ------ ------
Growth rate applied(beyond
approved forecast period) 2% 2%
---------------------------- ------ ------
Discount rate 17.1% 17.5%
---------------------------- ------ ------
The growth rate used in the value in use calculation reflects
management's assessment of the likely growth rate achievable by the
Group at the stores that were in existence at the acquisition of
Crawshaw Butchers Limited. This is a prudent rate which does not
exceed the average long-term growth rate for the relevant
markets.
Management have determined the discount rate by reference to
other companies of similar nature within their industry and their
assessment of the optimal long-term capital structure for the
business.
12. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES
Group Group
-------------------------------- -------- --------
2011 2010
-------------------------------- -------- --------
GBP GBP
-------------------------------- -------- --------
Non-current
-------------------------------- -------- --------
Investment in equity accounted
investees 100,207 135,207
-------------------------------- -------- --------
Other investments comprise a 50% share in RGV Refrigeration, a
partnership jointly owned by Crawshaw Butchers Limited and Mr M
Hornsby. The principal place of business for RGV Refrigeration is
17-25 John Street, Rotherham, South Yorkshire S60 1EQ.The last year
end being 30 September 2010.The Group does not exert control over
the entity.
The carrying value of investments in equity accounted investees
includes GBP20,207 (2010: GBP 27,246) accumulated profit held by
RGV Refrigeration.
13. OTHER INVESTMENTS
Company Company
------------------------------------- ----------- -----------
2011 2010
------------------------------------- ----------- -----------
GBP GBP
------------------------------------- ----------- -----------
Non-current
------------------------------------- ----------- -----------
Investment in Crawshaw Holdings Ltd 11,700,000 11,700,000
------------------------------------- ----------- -----------
14. DEFERRED TAX LIABILITIES
Recognised deferred tax liabilities
Deferred tax liabilities are attributable to the following:
Group
Liabilities
--------------------------- -------------
2011
--------------------------- -------------
GBP
--------------------------- -------------
Plant and equipment 383,859
--------------------------- -------------
Intangible assets - brand 149,135
--------------------------- -------------
Temporary differences (46,048)
--------------------------- -------------
486,946
--------------------------- -------------
Movement in deferred tax during the period
Recognised
31 January in income 31 January
2010 Current period 2011
---------------------------------- ----------- ---------------- -----------
GBP GBP GBP
---------------------------------- ----------- ---------------- -----------
Plant and equipment 362,430 21,429 383,859
---------------------------------- ----------- ---------------- -----------
Deferred tax relating to
intangible assets - brand 164,370 (15,235) 149,135
---------------------------------- ----------- ---------------- -----------
Temporary differences (41,458) (4,590) (46,048)
---------------------------------- ----------- ---------------- -----------
485,342 1,604 486,946
---------------------------------- ----------- ---------------- -----------
15. INVENTORIES
Group Group
------------------ --------------------- -------------------
2011 2010
------------------ --------------------- -------------------
GBP GBP
------------------ --------------------- -------------------
Finished goods 361,647 484,998
------------------ --------------------- -------------------
Finished goods recognised as cost of sales in the year amounted to
GBP10,745,622 (2010: GBP10,803,774)
16. TRADE AND OTHER RECEIVABLES
Group Group Company Company
------------------------------- -------- -------- ---------- ----------
2011 2010 2011 2010
------------------------------- -------- -------- ---------- ----------
GBP GBP GBP GBP
------------------------------- -------- -------- ---------- ----------
Trade receivables 105,010 120,355 - -
------------------------------- -------- -------- ---------- ----------
Other tax and social security 45,482 10,863 - -
------------------------------- -------- -------- ---------- ----------
Prepayments and accrued
income 221,210 215,587 4,018 28,956
------------------------------- -------- -------- ---------- ----------
Amounts owed by group
undertakings - - 6,745,951 6,574,683
------------------------------- -------- -------- ---------- ----------
Corporation Tax Recoverable - 62,624 - 46,848
------------------------------- -------- -------- ---------- ----------
371,702 409,429 6,749,969 6,650,487
------------------------------- -------- -------- ---------- ----------
The directors consider that the carrying amount of trade and
other receivables approximates their fair value.
Aged analysis of trade receivables
31 January 2011 31 January 2010
------- -------------------------------------- --------------------------------------
Provision Provision
for for
Gross doubtful Net trade Gross doubtful Net trade
receivables debt receivables receivables debt receivables
------- ------------ ---------- ------------ ------------ ---------- ------------
GBP GBP GBP GBP GBP GBP
------- ------------ ---------- ------------ ------------ ---------- ------------
Not
past
due 65,907 - 65,907 83,637 - 83,637
------- ------------ ---------- ------------ ------------ ---------- ------------
Up to
1
month
past
due 34,276 - 34,276 32,619 - 32,619
------- ------------ ---------- ------------ ------------ ---------- ------------
Over 1
month
past
due 19,827 (15,000) 4,827 28,650 (24,551) 4,099
------- ------------ ---------- ------------ ------------ ---------- ------------
120,010 (15,000) 105,010 144,906 (24,551) 120,355
------- ------------ ---------- ------------ ------------ ---------- ------------
17. TRADE AND OTHER PAYABLES
Group Group Company Company
--------------------- ---------- ---------- -------- --------
2011 2010 2011 2010
--------------------- ---------- ---------- -------- --------
GBP GBP GBP GBP
--------------------- ---------- ---------- -------- --------
Current:
--------------------- ---------- ---------- -------- --------
Trade payables 1,639,144 1,684,969 - -
--------------------- ---------- ---------- -------- --------
Other creditors and
accruals 446,843 482,552 1,587 3,584
--------------------- ---------- ---------- -------- --------
Corporation Tax 151,339 - - -
--------------------- ---------- ---------- -------- --------
2,237,326 2,167,521 1,587 3,584
--------------------- ---------- ---------- -------- --------
Non-current:
--------------------- ---------- ---------- -------- --------
Accruals 138,742 122,375 - -
--------------------- ---------- ---------- -------- --------
138,742 122,375 1,587 3,584
--------------------- ---------- ---------- -------- --------
Trade payables and other creditors comprise amounts outstanding
for trade purchases and ongoing costs. The directors consider that
the carrying amount of trade payables approximates to their fair
value.
Non-current accruals relate to reverse lease premiums, which are
credited to the income statement on a straight-line basis over the
lease term.
18. EMPLOYEE BENEFITS
Pension plans
Defined contribution plans
The Group operates a defined contribution pension plan. The
assets of the scheme are held separately from those of the Group in
an independently administered fund. The amount charged to the
income statement represents the contributions payable to the scheme
in respect of the accounting period. Pension costs for the defined
contribution scheme are as follows:
2011 2010
GBP GBP
----------------------------- ------ ------
Defined contribution scheme 1,401 1,554
----------------------------- ------ ------
Share Based Payments
Share Options
Share options granted prior to the reverse acquisition are held
by former associates of Felix Group PLC. Further share options were
granted post reverse acquisition on 14 April 2008 to key employees
of the enlarged group, Crawshaw Group PLC. In line with the scheme
rules, options for employees who leave the business lapse after 6
months.
The share options in issue all relate to ordinary shares of 5p
and are to be settled by the physical delivery of shares are as
follows
Number
of
Number of options
options Granted Exercised Lapsed at 31
Date Exercise at 1 Feb in in in Jan Exercise
granted price 2010 period period period 2011 period
--------- ---------- ---------- -------- ---------- -------- -------- ---------
14 July
2003 to
14 July 13 July
2003 250p 45,000 - - - 45,000 2013
--------- ---------- ---------- -------- ---------- -------- -------- ---------
14 April
2008 to
14 April 14 April
2008 42.5p 1,058,822 - - 117,647 941,175 2018
--------- ---------- ---------- -------- ---------- -------- -------- ---------
The expected volatility is wholly based on the historic
volatility (calculated based on the weighted average remaining life
of the share options), adjusted for any expected changes to future
volatility due to publicly available information.
The fair value of options at grant date of 14 April 2008 of
11.5p was determined based on the black scholes model. The model
inputs were the share price of 42.5p, the exercise price of 42.5p,
expected volatility of 43%, expected dividends of GBPNil, a term of
two years and a risk free rate of 5%. During the year, the Group
recognised a charge of GBP19,723 (2010: GBP73,170) in relation to
equity settled share based payments in the consolidated statement
of comprehensive income. These option charges have been credited
against the retained earnings reserve. No further charge is
expected in relation to issued options.
19. CAPITAL AND RESERVES
Reconciliation of movements in capital and reserves - Group
Rev.
Share Share Acq. Capital Retained Total
------------ ---------- ---------- -------- -------- ---------- ----------
Cont.
Capital Premium Reserve Res. Earnings Equity
------------ ---------- ---------- -------- -------- ---------- ----------
GBP GBP GBP GBP GBP GBP
------------ ---------- ---------- -------- -------- ---------- ----------
Balance at
1 February
2009 2,334,009 4,981,049 446,563 149,311 (613,232) 7,297,700
------------ ---------- ---------- -------- -------- ---------- ----------
Profit for
the
period - - - - 227,683 227,683
------------ ---------- ---------- -------- -------- ---------- ----------
Share based
payment - - - - 73,170 73,170
------------ ---------- ---------- -------- -------- ---------- ----------
Loan note
conversion 294,118 705,8822 - - - 1,000,000
------------ ---------- ---------- -------- -------- ---------- ----------
Issue of
shares 262,813 630,687 - - - 893,500
------------ ---------- ---------- -------- -------- ---------- ----------
Balance at
31 January
2010 2,890,940 6,317,618 446,563 149,311 (312,379) 9,492,053
------------ ---------- ---------- -------- -------- ---------- ----------
Profit for
the
period - - - - 416,548 416,548
------------ ---------- ---------- -------- -------- ---------- ----------
Share based
payment - - - - 19,723 19,723
------------ ---------- ---------- -------- -------- ---------- ----------
Balance at
31 January
2011 2,890,940 6,317,618 446,563 149,311 123,892 9,928,324
------------ ---------- ---------- -------- -------- ---------- ----------
The reverse acquisition reserve was established under IFRS3
'Business Combinations' following the deemed acquisition of
Crawshaw Group Plc by Crawshaw Holdings Limited on 11 April
2008.
The capital contribution reserve arose in relation to the waiver
of shareholder loan note interest
prior to the reverse acquisition.
Reconciliation of movement in capital and reserves - Company
Share Share Merger Retained Total
capital premium reserve earnings equity
------------ ----------- ----------- ----------- ------------ -----------
GBP GBP GBP GBP GBP
------------ ----------- ----------- ----------- ------------ -----------
Balance at
1 February
2010 2,890,940 6,317,618 10,140,000 (1,001,655) 18,346,903
------------ ----------- ----------- ----------- ------------ -----------
Total
recognised
income and
expense - - - 101,479 101,479
------------ ----------- ----------- ----------- ------------ -----------
Balance at
31 January
2011 2,890,940 6,317,618 10,140,000 (900,176) 18,448,382
------------ ----------- ----------- ----------- ------------ -----------
The merger reserve was established on 11 April 2008 following
the share for share exchange undertaken between the Company and
Crawshaw Holdings Limited as part of the reverse acquisition.
SHARE CAPITAL - Group and Company
31.1.11 31.1.10
--------------------------------------- ---------- ----------
Authorised GBP GBP
--------------------------------------- ---------- ----------
96,678,257 ordinary shares of 5p each 4,833,913 4,833,913
--------------------------------------- ---------- ----------
Allotted, called up and fully paid GBP GBP
--------------------------------------- ---------- ----------
57,818,801 ordinary shares of 5p each 2,890,940 2,890,940
--------------------------------------- ---------- ----------
All issued shares are fully paid. The holders of ordinary shares
are entitled to receive dividends as declared from time to time and
are entitled to one vote per share at the meetings of the
company.
20. LOANS AND BORROWINGS - GROUP
2011 2010
------------------------- ---------- ----------
GBP GBP
------------------------- ---------- ----------
Non-current liabilities
------------------------- ---------- ----------
Medium term loan 400,000 900,000
------------------------- ---------- ----------
Mortgage 840,000 840,000
------------------------- ---------- ----------
1,240,000 1,740,000
------------------------- ---------- ----------
Terms and debt repayment schedule
Nominal interest Carrying
rate Year of maturity Fair value Amount
----------- ------------------ ----------------- ----------- ----------
GBP GBP
----------- ------------------ ----------------- ----------- ----------
Mortgage LIBOR+1.5% 2013 840,000 840,000
----------- ------------------ ----------------- ----------- ----------
Bank loan LIBOR+2.25% 2011 400,000 400,000
----------- ------------------ ----------------- ----------- ----------
1,240,000 1,240,000
------------------------------ ----------------- ----------- ----------
The following liabilities disclosed under bank loans are secured
by fixed and floating charges over the assets of the Group.
2011 2010
------------------------- ---------- ----------
Non-current liabilities GBP
------------------------- ---------- ----------
Medium term loan 400,000 900,000
------------------------- ---------- ----------
Mortgage 840,000 840,000
------------------------- ---------- ----------
1,240,000 1,740,000
------------------------- ---------- ----------
The principle features of the loans are as follows:
(a) A Revolving Credit Facility has a current balance of GBP0.4m
and carries an interest rate of LIBOR +2.25%.
(b) A mortgage of GBP840,000 against freehold property was taken
out on the 21(st) May 2008 over a 5 year period at a rate of LIBOR
+1.5%.
21. FINANCIAL INSTRUMENTS
The Group's principal financial instruments comprise loans and
borrowings, cash and trade creditors. The main purpose of these
financial instruments is to raise finance for the Group's
operations.
The main risks arising from the Group's financial instruments
are interest rate risk, liquidity risk and credit risk. The board
reviews and agrees policies for managing each of these risks and
they are summarised below.
Interest rate risk
The Group's exposure to market risk for changes in interest
rates relates primarily to the Group's long-term debt
obligations.
The Group has not currently entered into any steps to mitigate
its risk to variability in interest rates.
Credit risk
The Group's principal financial assets are cash and receivables.
The Group's credit risk is primarily attributable to trade
receivables. Trade receivables are included in the balance sheet
net of doubtful receivables, estimated by the Group's management
based on prior experience and their assessment of current economic
conditions.
At the balance sheet date the Directors consider there to be no
significant credit risk.
Liquidity risk
The Group's objective is to maintain a balance between
continuity of funding and flexibility through the use of cash and
bank loans. The cash generative nature of the business is forecast
to continue and therefore we have reduced our revolving credit
facility (RCF) requirement over the short term from GBP2.5m to
GBP1m to reduce our exposure to non utilisation fees. This facility
is in place until 30(th) June 2011. We plan to further reduce this
facility subject to capital expenditure requirements. The Directors
are confident that there will continue to be sufficient headroom to
cover liquidity risk.
Effective interest rates
In respect of income-earning financial assets and
interest-bearing financial liabilities, the following table
indicates their effective interest rates at the balance sheet date
and the periods in which they mature or, if earlier, are
repriced.
Effective
Financial Interest 1 to < 2 2 to < 5 5 years and
Instrument Rate < 1 year years years over
------------- ---------- --------- --------- --------- ------------
GBP GBP GBP GBP
------------- ---------- --------- --------- --------- ------------
Cash - 723,616 - - -
------------- ---------- --------- --------- --------- ------------
Loans 2.26% 400,000 - - 840,000
------------- ---------- --------- --------- --------- ------------
22. CAPITAL MANAGEMENT
The capital structure of the group is a mixture of (i) net debt
made up of borrowings and cash balances and (ii) equity comprising
issued share capital and reserves as detailed in note 19.
The Group's primary objective is to safeguard its ability to
continue as a going concern, through the optimisation of the debt
and equity balance, and to maintain a strong credit rating and
headroom. The Group manages its capital structure through detailed
management forecasts and clear authorization procedures for
significant capital expenditure. The Board makes appropriate
decisions in light of the current economic conditions and strategic
objectives of the Group.
A key objective of the Group's capital management is to maintain
compliance with the covenants set out in the bank facility.
Throughout the year, the Group has complied with this
policy.
There has been no change in the objectives, policies or
processes with regards to capital management during the years ended
31 January 2011 and 31 January 2010.
23. CAPITAL COMMITMENTS
2011 2010
------------------------------------------------- -------- -----
GBP GBP
------------------------------------------------- -------- -----
Contracts placed for future capital expenditure 107,079 -
not provided in the financial statements
------------------------------------------------- -------- -----
24. OPERATING LEASES
Non-cancellable operating lease rentals are payable as
follows:
Group Group Company Company
--------------------- ------------- ------------ ---------- --------
2011 2010 2011 2010
--------------------- ------------- ------------ ---------- --------
GBP GBP GBP GBP
--------------------- ------------- ------------ ---------- --------
Less than one year 714,204 668,703 - -
--------------------- ------------- ------------ ---------- --------
Between one and five
years 2,588,998 2,248,808 - -
--------------------- ------------- ------------ ---------- --------
More than five years 4,166,422 4,173,751 - -
--------------------- ------------- ------------ ---------- --------
Total 7,469,624 7,091,262 - -
--------------------- ------------- ------------ ---------- --------
The Company leases a number of retail outlets, warehouse and
factory facilities under operating leases. Land and buildings have
been considered separately for lease classification. During the
year GBP821,149 (2010: GBP807,579) was recognised as an expense in
the income statement in respect of operating leases.
25. RELATED PARTY TRANSACTIONS
Transactions with key management personnel
The Board and certain members of senior management are related
parties within the definition of IAS 24 (Related Party
Disclosures). Summary information of the transactions with key
management personnel is provided in note 6. Detailed disclosure of
the individual remuneration of Board members is included in The
Report of the Remuneration Committee on pages 12 to 13. There is no
difference between transactions with key management personnel of
the Company and the Group.
Transactions with subsidiaries
The Company has entered into transactions with its subsidiary
undertakings in respect of the following: provision of Group
services (including senior management, IT, accounting, purchasing
and legal services). Recharges are made to subsidiary undertakings
for intra- group balances, based on their amount and interest rates
set by Group management.
During the year these charges amounted to:
2011 2010
---------------------------------- -------- --------
GBP
---------------------------------- -------- --------
Interest on intra-group balances 328,018 287,712
---------------------------------- -------- --------
Management charges 200,000 200,000
---------------------------------- -------- --------
The amount outstanding from subsidiary undertakings to the
Company at 31 January 2011 totalled GBP6,745,951 (2010:
GBP6,574,682). Amounts owed to subsidiary undertakings by the
Company at 31 January 2011 totalled GBPnil (2010: GBPnil).
The Company has suffered no expense in respect of bad or
doubtful debts of subsidiary undertakings in the year (2010:
GBPnil).
Transactions with jointly controlled entities
Crawshaw Butchers Limited, a subsidiary of Crawshaw Holdings
Limited, holds a 50% share in a partnership which trades under the
name of RGV Refrigeration. The operations of the partnership
comprise of the maintenance and repair of refrigeration machinery
for a variety of customers.
During the year the transactions amounted to:
2011 2010
------------------------------------------- ------- -------
GBP
------------------------------------------- ------- -------
Amounts received in respect of management
charges 7,000 4,000
------------------------------------------- ------- -------
Amounts paid in respect of repair
and maintenance services 95,150 54,959
------------------------------------------- ------- -------
The amount outstanding from jointly controlled entities to the
Group at 31 January 2011 totalled GBP8,669 (2010: GBPnil). Amounts
owed to jointly controlled entities by the Group at 31 January 2011
totalled GBP9,655 (2010: GBP4,047).
The Group has suffered no expense in respect of bad or doubtful
debts of jointly controlled entities in the year (2010:
GBPnil).
Transaction with other related parties
During the year the Group paid GBP36,667 (2010: GBPnil) to
Electro Switch Limited in respect of consultancy services. Electro
Switch Limited is a company which provides such services and Mr R
Rose, a Director of Crawshaw Group Plc, is also a Director of this
Company. Amounts owed to Electro Switch Limited by the Group at 31
January 2011 totalled GBPnil (2010: nil).
The Group leases a property owned by The Colin Crawshaw Pension
Scheme for factory facilities and paid rental fee of GBP13,500 in
2011 (2010: GBP13,500). Amounts owed to The Colin Crawshaw Pension
Scheme by the Group at 31 January 2011 totalled GBPnil (2010:
GBPnil).
26. PRINCIPAL SUBSIDIARY UNDERTAKINGS
At 31 January 2011 Crawshaw Group PLC had the following
principal subsidiary undertakings:
Crawshaw Holdings Limited - United Kingdom - Intermediate
Holding Company
Crawshaw Butchers Limited - United Kingdom - Retail Butchers
*
The shareholdings were 100% of the subsidiary undertakings'
ordinary and preference shares. Each of the subsidiaries is
included in the consolidated financial statements.
* Not held directly but via Crawshaw Holdings Ltd
27. ULTIMATE PARENT COMPANY
The Company is the ultimate parent company of the Group.
No other group financial statements include the results of the
Company.
28. ANNUAL REPORT
The Annual Report will be posted to shareholders on 6(th) May,
2011 and will also be available from the Company's website at
www.crawshawgroupplc.com.
29. ANNUAL GENERAL MEETING
The Annual General Meeting will be held at Bradmarsh Business
Park, Bow Bridge Close, Rotherham S60 1BY on 27 June 2011 at 12
noon.
The financial information set out above does not constitute the
Company's consolidated statutory accounts for the periods ended 31
January 2011 or 31 January 2010 but is derived from those accounts.
Statutory accounts for the period ended 31 January 2010 have been
delivered to the Registrar of Companies, and those for the period
ended 31 January 2011 will be delivered following the Company's
Annual General Meeting. The auditors, KPMG Audit Plc, have reported
on those accounts; their reports were unqualified and did not
contain statements under section 498(2) or (3) of the Companies Act
2006 or equivalent preceding legislation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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