TIDMCRAW
RNS Number : 4209W
Crawshaw Group PLC
27 April 2016
Wednesday 27 April, 2016
Crawshaw Group Plc
"Crawshaws delivers record sales growth during transformative
year as it implements accelerated store expansion strategy"
Full Year Results
Crawshaw Group Plc ("Crawshaw", the "Company" or the "Group"),
the fresh meat and food-to-go retailer, announces results for the
year ended 31 January 2016.
Financial Highlights:
-- Turnover up +51% to GBP37.1m (2015: GBP24.6m)
-- LFL sales growth of +1.8% (2015: +5%)
-- Adjusted** EBITDA up +45% to GBP2.6m (2015: GBP1.8m)
-- EBITDA* GBP1.0m (2015: GBP1.6m)
-- Statutory loss before tax of GBP0.3m (2015: Profit before tax
GBP1.2m), in line with plan and reflecting investment for
accelerated expansion
-- Cash balances of GBP4.9m at 31 January 2016 (GBP9.1m at 31
January 2015) following the acquisition of Gabbotts Farm
-- Final dividend of 0.47p (2015: 0.47p)
* EBITDA is defined by the Group as profit/loss before tax,
exceptional items, depreciation, amortisation, profit/(loss) on
disposal of assets, net finance costs and share based payment
charges attributable to the LTIP Growth Share Scheme.
** Adjusted EBITDA is defined by Group as EBITDA before
"accelerated opening costs". Accelerated opening costs are defined
by the Group as the overhead investment in people, processes,
systems and new store pre-opening costs i.e. costs directly
associated with our accelerated store opening programme. In the
period these costs amounted to GBP1.6m (2015: GBP0.2m) resulting in
an adjusted EBITDA of GBP2.6m (2015: GBP1.8m).
Strategy Highlights:
-- Transformative year with the new management team and the
appropriate infrastructure in place to deliver the rapid growth
plan
-- Significant investment in the rebranding of the legacy estate
and standardisation of the retail proposition complete ahead of the
new store rollout
-- Record levels of premium quality homemade produce sold after
investment in our unique vertically integrated concept
-- 17 stores added in the year and performing in line with expectations
-- Extensive property pipeline will deliver 15 new stores in
current year, including further expansion into Yorkshire/North West
heartlands and entering Midlands/Birmingham area
Chief Executive Officer, Noel Collett, comments:
"We are pleased to report another set of solid results for the
business and are delighted with the significant progress we've made
during a very transformative year. We have proved that customers
love our compelling retail concept, delivering quality fresh meat
and food-to-go at exceptional prices. With strong foundations now
in place, we are well positioned to build on our current position
and establish Crawshaws as a national brand."
Enquiries:
Crawshaw Group plc
Noel Collett, Alan Richardson 01709 369 600
Peel Hunt LLP
Dan Webster, Adrian Trimmings, George Sellar 020 7418 8900
Chairman's Statement
'Another strong year for the business with record sales growth
and our accelerated store rollout programme very much on track'
Trading performance highlights
-- 51% increase in group turnover to GBP37.1m (2015: GBP24.6m)
-- 45% increase in adjusted** EBITDA to GBP2.6m (2015: GBP1.8m)
-- EBITDA* GBP1.0m (2015: GBP1.6m)
-- LFL sales growth of +1.8% (2015: +5%)
-- 39 trading stores at year end (2015: 22 trading stores)
-- Statutory loss before tax of GBP0.3m (2015: profit before tax GBP1.2m)
-- Cash balances of GBP4.9m at 31 January 2016 (GBP9.1m at 31
January 2015) following acquisition of Gabbotts Farm Limited.
-- Final dividend of 0.47p (2015: 0.47p)
* EBITDA is defined by the Group as profit/loss before tax,
exceptional items, depreciation, amortisation, profit/(loss) on
disposal of assets, net finance costs and share based payment
charges attributable to the LTIP Growth Share Scheme.
** Adjusted EBITDA is defined by Group as EBITDA before
"accelerated opening costs". Accelerated opening costs are defined
by the Group as the overhead investment in people, processes,
systems and new store pre-opening costs i.e. costs directly
associated with our accelerated store opening programme. In the
period these costs amounted to GBP1.6m (2015: GBP0.2m) resulting in
an adjusted EBITDA of GBP2.6m (2015: GBP1.8m).
Crawshaw Group has delivered an underlying strong performance
for the twelve months to 31 January 2016 with continued trading
momentum and profitable growth.
Results and strategic progress
This was a transformative year as the new management team
prepared the business for the planned increased pace of expansion
and at the same time delivered a record sales performance with
total sales increasing by 51% to GBP37.1m. I am delighted with the
progress that has been made so far with a number of key milestones
being achieved, most notably the acquisition, integration and
rebranding of the Gabbotts Farm Ltd business in H1 and the opening
of 6 new Crawshaws stores. Both of these growth drivers have
contributed positively to our EBITDA development and are performing
in line with our expectations.
I am therefore pleased to report a 45% increase in our adjusted
EBITDA performance as the strong sales growth is being converted
into strong profit growth. A particular highlight has been the
gross margin progression which strengthened further to 45.1% (2015:
44.4%). EBITDA post accelerated opening costs reduced as expected
to GBP1.0m (2015: GBP1.6m) as we increased our overhead to invest
in growth.
In the year under review we report a statutory loss before tax
of GBP0.3m (2015: GBP1.2m profit before tax). It's worth
reiterating the reasons for this loss. Opening in excess of 15 new
stores a year is no simple task, especially bearing in mind our
stores are quite complex having both a fresh and food to go
element. So we have built an internal resource in advance to allow
us to find the retail sites, recruit and train the new staff,
manage the pre-opening tasks and marketing, and to ensure that for
each opening we hit the ground running.
This resource is now largely in place, and so our accelerated
opening programme is in full force. But this resource cost us
GBP1.6m in the year under review, and so it needs to be identified
separately so that the true underlying performance of the business
becomes visible. It's also worth highlighting that new shops are
expected to trade profitably from day one and, when mature,
produce, on average, over GBP1m of sales per year, and an EBITDA
contribution of GBP140,000.
Cash
The cash position of the business continues to be extremely
robust. Operating cash flow and movements in working capital
generated GBP2.2m which almost entirely funded the GBP2.3m of
capital investment in new stores, refurbishments of legacy stores
and investment in our factory production equipment in the year. The
net GBP4.2m decrease in cash balances was a function of our
acquisition of Gabbotts Farm Ltd, dividend payments and tax
payments in the year. With a closing cash balance of GBP4.9m and
continued focus on working capital improvements, we have the funds
in place to deliver on our growth plan.
People
I would like to thank all of our 562 colleagues for their effort
and commitment during this exciting time for our business. Since
Noel joined Crawshaws as CEO in March 2015, he has successfully and
carefully restructured and expanded the management team to ensure
that we have the appropriate balance of expertise and dynamic to
deliver our growth plan.
Outlook
Since my last statement, we continue to see strong sales growth
on last year. Total group sales for the first 7 weeks of the new
financial period have increased by +64%. The cash gross margin in
LFL stores has increased by +3.8% in the same 7 week period, +3.7%
through an increase in margin rate and +0.1% through an increase in
sales volume.
Our model continues to perform well. The business is at a very
exciting stage with the strengthening of the legacy estate
supplemented by the addition of a rapidly expanding new store
estate. The newly opened stores are trading well, and profitably,
in line with our expectation. The business is in great shape to
deliver the planned scale rollout at pace and we have a strong
pipeline of stores for 2016, so we look forward to reporting on our
progress during the year ahead. In fact we have already opened 5
new stores during the current year, and these are also performing
as expected.
We are pleased to declare the payment of a final dividend for
the year of 0.47 pence per share, which together with the interim
dividend of 0.10 pence per share, paid on 30 October 2015, takes
the total dividend for the year to 0.57 pence per share (2015: 0.57
pence per share). Shareholder approval will be sought at the Annual
General Meeting, to be held on 29 June 2016, to pay the final
dividend on 5th August 2016 to shareholders on the register 8 July
2016. The ex-dividend date will be 7 July 2016. As with last year,
shareholders will have the opportunity to elect to reinvest their
cash dividend and purchase existing shares in the Company through a
Dividend Reinvestment Plan ("DRIP").
In summary, the foundations for our accelerated growth are in
place and the rollout is very much underway. We now have a strong
resource that will enable us to deliver another year of rapid
expansion and profitable growth. We are therefore very confident
and excited about the future.
Richard Rose
Chairman
26 April 2016
Chief Executive Officer's Review
"We have successfully delivered across all strategic pillars
during a transformative 2015 and we look forward to a year of rapid
expansion and further profitable growth"
Introduction
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Since joining the business in March 2015, I continue to be
extremely impressed with our colleagues who are totally committed
to maintaining the values of the company and ensuring we
consistently offer great quality fresh meat and food to go at
affordable prices.
I have also been impressed by the way the team have embraced the
changes and challenges during this transformative year in
developing the infrastructure to support our rapid growth strategy.
We are now well positioned to leverage our unique retail concept
and accelerate the pace of rollout to establish Crawshaws as a
national brand.
Transformative year
We have made significant progress during 2015 in developing the
capability, structure and discipline throughout the business to
channel our entrepreneurial spirit in delivering consistent results
for our customers, shareholders and colleagues.
The preparations in delivering our growth plans has required
strategic investments in key roles and skills within the Executive
Team to achieve the optimal balance in experience and expertise.
Our Plc Board has been strengthened with the appointment of Alan
Richardson as CFO and Kevin Boyd as CCO, and our Senior Team has
been strengthened with key appointments in HR, Training, Property,
Facilities, Retail Operations, IT and Finance. Additionally, we
recruit and train the teams required to staff our new stores ahead
of each opening with the result that each new stores trades
profitably from its very first day.
These appointments represent an important investment ahead of
our accelerated growth to ensure that we are capable of delivering
this plan with structure, control and discipline. Given that this
overhead is exclusively focused around the opening of new stores,
they are regarded as 'accelerated opening costs'. It is therefore
important to highlight and exclude these to show the underlying
performance when evaluating the profitability and returns of the
legacy business, which demonstrates that our stores continue to be
very profitable, with each store converting GBP1m annual sales into
an EBITDA contribution of 14%.
As we open more and more stores, the accelerated opening costs,
and indeed the fixed element of our central overhead, will become a
smaller proportion of the whole.
Revenue growth
For the 12 months to 31 January 2016, Group revenue increased by
51% from GBP24.6m to GBP37.1m. This strong growth was supported
both by contributions from our LFL stores and from our 17 new
stores in the year, which includes the 11 stores acquired from
Gabbotts Farm Ltd (which have been rebranded Crawshaws).
LFL sales were +1.8% for the full year, with H2 LFL sales of
+2.6% building on the +1% LFL sales in H1. This achievement was
very pleasing, particularly given the disruption and challenging
high street footfall patterns caused by the prolonged adverse
weather conditions in the North of England throughout November and
December. And it was also particularly pleasing given that we were
able to further increase our gross margin.
We have continued this growth momentum into the new financial
year with total group sales in the first 7 weeks of the new
financial year increasing by +64% and LFL also performing
positively at +0.1% for the same period, again with a further
improvement in gross margin.
New capabilities and opportunities
Looking at the opportunities ahead, we have identified the key
elements in successfully delivering our accelerated rollout;
(a) Acquiring the right sites at the right price
(b) Converting sites efficiently with a shop fit-out that meets our high operational standards
(c) Ensuring that we have the trained colleagues delivering the
great Crawshaws' customer service
(d) A logistics and production capability to ensure our stores
have sufficient product to serve our customers.
We have made significant progress in developing the capability
to deliver on all these fronts through our newly strengthened
management structure. We have also developed and expanded key
strategic partnerships within the areas of property, facilities,
recruitment and supply chain. This approach has quickly become
established in the business and is already demonstrating our
capability to deliver a run-rate target of one new store opening
every three weeks.
Strategic pillars for 2016
1. Driving profitable sales
We continue to work very hard to give our customers great
quality fresh meat at affordable prices, which drives their loyalty
and underpins our sales momentum.
During the course of the year we have made great progress in
developing and standardising our retail proposition across the
entire estate. This has included the successful relaunch of our
fresh meat range and our legendary fixed price multi-save offers,
as well as providing extra value to customers through our new
weekly 'Manager's Meaty Cut' promotions.
With our factory now producing record-levels of premium quality
homemade produce, almost 20 tonnes per week, we will continue with
the capital expenditure in our factory production equipment to
ensure we have the capability to further increase our fantastic
award winning homemade premium fresh meat offer. With this
investment and our internal butchery expertise, we will introduce a
widened premium range of lean steak burgers, premium pork and apple
burgers, a variety of new recipe sausages, lean steak meatballs,
lean steak kebabs and grill sticks and much more. This unique
vertically integrated production capability allows us to continue
to offer a very high quality product at value prices in large
volumes.
In parallel, we plan to further expand and enhance our
food-to-go range with the introduction of the 'Butchers Kitchen'
brand, which provides the platform to showcase the quality of our
fresh meat produce presented to our customers, cooked and ready to
eat on-the-go.
In addition to these profitable sales opportunities, we will
continue to invest in other key initiatives in the coming year to
maintain existing customer loyalty and achieve new customer
acquisitions, such as new marketing activities and developing a
social media presence.
2. Disciplined growth strategy
The core part of the Group's strategy is to rapidly increase the
number of stores and spread the geographical presence of the
Crawshaws brand in a disciplined manner.
We have successfully added 17 more stores to the Group during
the last year taking our portfolio to 39 stores, which has also
expanded our geographical coverage to the North West of
England.
Our pipeline strategy will also see us adding new stores in
catchment areas across our heartlands of Yorkshire and the North
West. Furthermore, we will be opening small clusters of stores in
entirely new catchments in the Midlands and Birmingham areas. The
locations of our stores will continue to be a representative spread
of our current portfolio, which will see us opening a blend of
stores on the high streets, in shopping centre locations and will
include a standalone factory shop.
3. New stores performance
Our recently opened new stores are performing in line with
expectations, contributing profitably from day one and are further
expected to grow in sales and contribution as they mature. The
sales profile of our new stores is shaped such that food-to-go
sales reach maturity very soon after opening as passing customers
quickly build visits into their routines enjoying the quality
'Butcher's Kitchen' range. On fresh meat, we experience a gradual
increase as customers experiment with the range and build
confidence and loyalty over a slightly longer time period.
Our customers are very loyal, and recent customer insight data
indicates a market leading Net Promoter Score (NPS) of 94. This
data has indicated that those customers who buy fresh meat tend to
reward us with the majority of their meat spend - we have therefore
developed a series of new store opening marketing initiatives to
incentivise customers to try the full breadth of our fresh meat
offer and accelerate the pace with which we are able to convert
them into loyal fresh meat shoppers. This approach was first
trialed in our 40th store opening at Birchwood and initial results
are also very encouraging.
Our people make the difference
As part of our listening, our customers have told us that they
choose Crawshaws over other destinations due to a combination of
quality, price and service. We are a people business and our 562
colleagues continue to be dedicated to creating the environment and
atmosphere that our customers really value. Our achievements would
not be possible without our colleagues and I am immensely proud of
their commitment and passion in delivering amazing value to our
customers every day.
Looking forward
Looking forward to the year ahead, whilst the wider economic
climate looks likely to remain challenging, we have demonstrated
that we are well positioned to succeed against this backdrop. We
will continue to manage the business tightly during this exciting
period of accelerated growth and we will remain focused on ensuring
our retail proposition delights the customers that choose or need
to shop with us.
We have already opened 5 new stores in the current year (in
Birchwood, Blackburn, Cannock, Warrington and Widnes), and have a
pipeline at various stages. We are therefore confident of meeting
our target of 15 new stores for the year.
We look to the future with great confidence and excitement.
Noel Collett
Chief Executive Officer
26 April 2016
Chief Financial Officer's Review
"We have made significant improvements to our cash flow
management and business wide systems and control infrastructure
creating a strong platform to deliver our rapid growth plans"
Revenue and gross profit
Total revenue for the Group increased by 51% to GBP37.1m (2015:
GBP24.6m) with the growth being supported by contributions from our
LFL stores and 17 new stores in the year.
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Gross profit margins have further developed in the year to
45.1%, a 70bps increase on 2015. The Group's gross margin was
positively impacted by the Gabbotts Farm acquisition and the higher
margin through their higher participation of food-to-go. In
addition, the meat pricing environment has been favorable in the
year which has allowed us to give value to customers through
targeted promotional activity whilst positively contributing to
EBITDA.
Presentation of results
To present a clear view of performance of the Group in total and
the costs directly driven by the growth strategy, we present an
adjusted EBITDA number which excludes accelerated opening costs -
adjusted EBITDA is our primary internal measure when assessing
Group performance.
We define accelerated opening costs as the investments in
people, processes and systems in the year to provide direct support
for our accelerated opening programme. In the year, these costs
amounted to GBP1.6m (2015: GBP0.2m) and are analysed by component
of spend in the table below.
Adjusted EBITDA
2016 2015
GBP GBP
--------------------------- ---------- ----------
EBITDA* 1,013,727 1,573,174
--------------------------- ---------- ----------
Accelerated Opening Costs 1,558,316 205,080
--------------------------- ---------- ----------
Adjusted EBITDA 2,572,043 1,778,254
--------------------------- ---------- ----------
* Reconciled to Operating Loss on the face of the Statement of
Comprehensive Income
Accelerated opening costs
2016 2015
GBP GBP
------------------------------------- ---------- --------
Salaries 814,089 48,000
------------------------------------- ---------- --------
Board restructure 195,098 -
------------------------------------- ---------- --------
New store pre-opening costs 147,148 -
------------------------------------- ---------- --------
Consultancy (property / recruitment
/ other) 296,873 57,000
------------------------------------- ---------- --------
Other 105,108 100,080
------------------------------------- ---------- --------
Total 1,558,316 205,080
------------------------------------- ---------- --------
Profit Before Tax "PBT" and Earnings Per Share "EPS"
The Group delivered a loss before tax of GBP0.3m (2015: GBP1.2m
profit) as we incur additional costs to deliver our growth plan and
we recognised an IFRS 2 shared based payment charge through the
income statement of GBP0.4m (2015: NIL). This translated to a
negative EPS as expected at (0.342) pence per share (2015: 1.301
pence per share).
Operational overheads
Operational overheads are defined as the administrative expenses
of the Group less accelerated opening costs, exceptional costs,
impairment, depreciation and amortisation and share based payments
as this gives a clearer reflection on the underlying operational
costs performance of the Group. On this basis, the ratio of
overhead costs as a % of sales has increased to 38% (2015: 37%).
This reflects the higher margin, higher cost base model of the
Gabbotts Farm stores and a small dilution from new stores where
initial cost ratios are higher as the stores trade through their
sales maturity profile.
2016 2015
GBP GBP
------------------------------- ------------ ----------
Administrative expenses 17,114,642 9,802,982
------------------------------- ------------ ----------
Accelerated opening
costs (1,558,316) (205,080)
------------------------------- ------------ ----------
Depreciation and amortisation (930,065) (436,372)
------------------------------- ------------ ----------
Share based payment (359,592) -
------------------------------- ------------ ----------
Exceptional costs (105,367) -
------------------------------- ------------ ----------
Operational overheads 14,161,302 9,161,530
------------------------------- ------------ ----------
Operation overheads
% of sales 38% 37%
------------------------------- ------------ ----------
Cash flow
Our cash flow position remains strong with GBP4.9m cash at the
end of the financial year. Cash control has been a significant
focus for the business with creditor term extensions being agreed
with key strategic partners on both meat supply and shop fit out.
This has successfully increased creditor days to 59 days (2015: 46
days). Alongside the positive working capital benefits of the new
stores opened in the year, this has allowed us to broadly fund the
organic expansion of 6 new stores from operational cash flow with
the overall net GBP4.2m decrease in cash being used to fund the
Gabbotts Farm acquisition and pay dividends and tax in the
year.
Given the scale of our expansion plans, we have also reviewed
our capital allowance position which has resulted in a tax
repayment of GBP148,000 in February 2016.
Control environment and management information
To deliver the growth plan with the necessary control and
discipline requires an appropriate platform. Whilst the tools and
control environment currently in place have served the business
well, they were not sufficiently scalable. As a result, we have
started to implement Microsoft Navision as our core Enterprise
Resource Planning (ERP) system. We are part way through the
implementation of Phase 1 which will deliver a common warehouse
management and financial accounting / control platform which will
be complete in H1 FY 2017. Further developments are planned to
integrate store ordering and sales reporting.
In addition to our ERP implementation, we are also significantly
developing our management information capability. All new stores
(including the 6 organic new stores in FY 2016) are being launched
with EPOS tills. These provide us with the granular transaction and
item level detail we need to optimise sales and profit performance
going forward.
Summary
The Group has made good progress on executing the growth plan in
the year delivering both profitable sales growth from the legacy
operation and successfully adding 17 trading stores to the estate.
We have made significant improvements to our cash flow management
and business wide systems and control infrastructure creating a
strong platform to deliver our rapid growth plans.
Alan Richardson
Chief Financial Officer
26 April 2016
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 31 January 2016
31 January 31 January
2016 2015
Note GBP GBP
------------------------------------------------------------ ----- ------------- -------------
Revenue 37,060,203 24,619,589
Cost of sales (20,356,001) (13,698,483)
------------------------------------------------------------ ----- ------------- -------------
Gross profit 16,704,202 10,921,106
------------------------------------------------------------ ----- ------------- -------------
Other operating income 2 29,143 18,678
Administrative expenses (17,114,642) (9,802,982)
Operating (loss)/profit (381,297) 1,136,802
Finance income 6 19,576 48,365
Finance expenses 6 (1,914) (6,233)
------------------------------------------------------------ ----- ------------- -------------
Net finance expense 17,662 42,132
Share of profit of equity accounted investees (net of tax) 19,020 15,464
------------------------------------------------------------ ----- ------------- -------------
(Loss)/profit before income tax (344,615) 1,194,398
Income tax credit/(expense) 7 75,211 (299,804)
------------------------------------------------------------ ----- ------------- -------------
Total recognised (loss)/income for the period (269,404) 894,594
------------------------------------------------------------ ----- ------------- -------------
Attributable to:
Equity holders of the Company (269,404) 894,594
------------------------------------------------------------ ----- ------------- -------------
Operating (loss)/profit analysed as:
EBITDA* 1,013,727 1,573,174
Exceptional Costs 25 (105,367) -
Share Based Payment Charge (359,592) -
Depreciation and Amortisation (930,065) (436,372)
Operating (loss)/profit (381,297) 1,136,802
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------------------------------------------------------------ ----- ------------- -------------
Basic (loss)/earnings per ordinary share (0.342)p 1.301p
Diluted (loss)/earnings per ordinary share (0.342)p 1.301p
------------------------------------------------------------ ----- ------------- -------------
* EBITDA is defined by the Group as the profit/(loss) before
tax, exceptional items, depreciation, amortisation and share based
payment charges.
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 2016
Group Group Company Company
2016 2015 2016 2015
Note GBP GBP GBP GBP
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
ASSETS
Non current assets
Property, plant and equipment 9 7,183,993 5,363,236 - -
Intangible assets - goodwill and related acquisition
intangibles 10 11,028,130 7,629,305 - -
Investment in equity accounted investees 11 125,444 106,424 - -
Investments in subsidiaries 12 - - 16,571,501 11,946,500
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total non current assets 18,337,567 13,098,965 16,571,501 11,946,500
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Current assets
Inventories 14 1,013,452 640,400 - -
Trade and other receivables 15 726,156 483,400 2,784,389 6,666,106
Cash and cash equivalents 4,879,914 9,090,286 7,945 7,945
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total current assets 6,619,522 10,214,086 2,792,334 6,674,051
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total assets 24,957,089 23,313,051 19,363,835 18,620,551
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
SHAREHOLDERS' EQUITY
Share capital 3,946,822 3,940,940 3,946,822 3,940,940
Share premium 13,941,141 13,897,023 13,941,141 13,897,023
Reverse acquisition reserve 446,563 446,563 - -
Merger reserve - - 508,146 508,146
Retained earnings 1,327,422 1,686,501 863,318 268,297
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total shareholders' equity 19,661,948 19,971,027 19,259,427 18,614,406
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
LIABILITIES
Non current liabilities
Other payables 16 279,088 272,265 - -
Interest bearing loans and borrowings 18 34,999 - - -
Deferred tax liabilities 13 617,775 531,980 - -
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total non current liabilities 931,862 804,245 - -
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Current liabilities
Trade and other payables 16 4,325,569 2,537,779 104,408 6,145
Interest bearing loans and borrowings 18 37,710 - - -
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total current liabilities 4,363,279 2,537,779 104,408 6,145
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total liabilities 5,295,141 3,342,024 104,408 6,145
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
Total equity and liabilities 24,957,089 23,313,051 19,363,835 18,620,551
----------------------------------------------------------- ----- ----------- ----------- ----------- -----------
These financial statements were approved by the Board of
Directors on 26 April 2016 and were signed on its behalf by:
Alan Richardson
Director and Company Secretary
Company registered number: 04755803
Statements of Changes in Shareholders' Equity
Reverse
Share Share acquisition Retained Total
capital premium reserve Earnings equity
GBP GBP GBP GBP GBP
--------------------------------- ---------- ----------- ------------ ---------- -----------
Group
Balance at 1 February 2014 2,890,940 6,317,618 446,563 1,119,348 10,774,469
--------------------------------- ---------- ----------- ------------ ---------- -----------
Profit for the period - - - 894,593 894,593
Dividend on equity Shares - - - (327,440) (327,440)
Share Placing 20,999,994 Shares 1,050,000 7,579,405 - - 8,629,405
--------------------------------- ---------- ----------- ------------ ---------- -----------
Balance at 31 January 2015 3,940,940 13,897,023 446,563 1,686,501 19,971,027
--------------------------------- ---------- ----------- ------------ ---------- -----------
Loss for the period - - - (269,404) (269,404)
Share based payment charge - - - 359,592 359,592
Dividend on equity Shares - - - (449,267) (449,267)
Share options 117,647 Shares 5,882 44,118 - - 50,000
--------------------------------- ---------- ----------- ------------ ---------- -----------
Balance at 31 January 2016 3,946,822 13,941,141 446,563 1,327,422 19,661,948
--------------------------------- ---------- ----------- ------------ ---------- -----------
The reverse acquisition reserve was estblished under IFRS 3
'Business Combinations' following the deemed acquisition of
Crawshaw Group Plc by Crawshaw Holdings Limited on 11 April
2008.
Reverse
Share Share acquisition Retained Total
capital premium reserve Earnings equity
GBP GBP GBP GBP GBP
--------------------------------- ---------- ----------- ------------ ---------- -----------
Company
Balance at 1 February 2014 2,890,940 6,6317,618 508,146 394,155 10,110,859
--------------------------------- ---------- ----------- ------------ ---------- -----------
Profit for the period - - - 201,582 201,582
Dividend on equity shares - - - (327,440) (327,440)
Share placing 20,999,994 shares 1,050,000 7,579,405 - - 8,629,405
--------------------------------- ---------- ----------- ------------ ---------- -----------
Balance at 1 February 2015 3,940,940 13,897,023 508,146 268,297 18,614,406
--------------------------------- ---------- ----------- ------------ ---------- -----------
Profit for the period - - - 697,288 697,288
Share based payment charge - - - 347,000 347,000
Dividend on equity shares - - - (449,267) (449,267)
Share options 117,647 shares 5,882 44,118 - - 50,000
--------------------------------- ---------- ----------- ------------ ---------- -----------
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April 27, 2016 02:00 ET (06:00 GMT)
Balance at 31 January 2016 3,946,822 13,941,141 508,146 863,318 19,259,427
--------------------------------- ---------- ----------- ------------ ---------- -----------
The merger reserve was established on 11 April 2008 following a
share for share exchange between the Company and Crawshaw Holdings
Limited (CHL) as part of a reverse acquisition. As a result of this
transaction the Company acquired CHL which in turn owned 100% of
the share capital of Crawshaw Butchers Limited (CBL).
In 2012 CHL transferred its investment in CBL to the Company at
book value.
Cash Flow Statements
For the period ended 31 January 2016
Group Group Company Company
31 January 31 January 31 January 31 January
2016 2015 2016 2015
GBP GBP GBP GBP
------------------------------------------------------------ ------------- ------------ ------------ ------------
Cash flows from operating activities
(Loss)/profit for the period (269,404) 894,594 697,288 201,582
------------------------------------------------------------ ------------- ------------ ------------ ------------
Adjustments for:
Depreciation and amortisation 924,786 432,116 - -
Loss on sale of property, plant and equipment 5,279 4,256 - -
Net financial charges (17,662) (42,131) - -
Share based payment charges 359,592 - - -
Share of profit of equity accounted investees (net of tax) (19,020) (15,464) - -
Taxation (75,211) 299,804 - (78,213)
Dividend received - - (949,267) (327,440)
------------------------------------------------------------ ------------- ------------ ------------ ------------
Operating cashflow before movements in working capital 908,360 1,573,175 (251,979) (204,071)
------------------------------------------------------------ ------------- ------------ ------------ ------------
Movement in trade and other receivables 260,126 (129,965) (2,260,101) (24,180)
Movement in trade and other payables 1,132,597 260,765 6,161,868 (5,784)
Movement in inventories (109,668) 66,480 - -
Tax (paid)/received (326,317) (218,263) 78,213 71,521
------------------------------------------------------------ ------------- ------------ ------------ ------------
Net cash generated/(used in) from operating activities 1,864,998 1,552,192 3,728,001 (162,514)
------------------------------------------------------------ ------------- ------------ ------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (2,265,355) (1,559,393) - -
Proceeds from sale of property, plant & equipment 5,542 12,545 - -
Received from equity accounted investees - - - -
Purchase of subsidiary (4,318,140) (237,371) (4,278,001) (246,500)
Cash acquired on purchase of subsidiaries 811,379 - - -
Interest received 19,576 48,365 - -
Interest paid (1,914) (6,233) - -
Dividend received - - 949,267 327,440
Dividend paid (449,267) (327,440) (449,267) (327,440)
------------------------------------------------------------ ------------- ------------ ------------ ------------
Net cash (used in) investing activities (6,198,079) (2,069,527) (3,778,001) (246,500)
------------------------------------------------------------ ------------- ------------ ------------ ------------
Cash flows from financing activities
Repayment of loans - (450,000) - -
Share placing - 8,629,405 - 8,629,407
HP financing 72,709 - - -
Share capital raised 50,000 - 50,000 -
Movements in amounts owed by group companies - - - (8,216,893)
------------------------------------------------------------ ------------- ------------ ------------ ------------
Net cash generated from financing activities 122,709 8,179,405 50,000 412,512
------------------------------------------------------------ ------------- ------------ ------------ ------------
Net change in cash and cash equivalents (4,210,372) 7,662,070 - 3,500
------------------------------------------------------------ ------------- ------------ ------------ ------------
Cash and cash equivalents at start of period 9,090,286 1,428,216 7,945 4,445
Cash and cash equivalents at end of period 4,879,914 9,090,286 7,945 7,945
------------------------------------------------------------ ------------- ------------ ------------ ------------
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 associates and joint
ventures. 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 current financial period is a 52 week period to 31 January
2016. The prior year was a 53 week period.
New IFRS and amendments to IAS and interpretations
The following amendments to standards are mandatory for the
first time for the 52 week ended 31 January 2016, but do not have a
material impact on the Group:
- IFRIC 21, 'Levies';
- Improvements 2011-13;
- Improvements 2010-12; and
- Amendment to IAS 19: Defined benefit plans: Employee contributions.
There are a number of standards and interpretations issued by
the IASB that are effective for financial statements after this
reporting period, including IFRS 9 'Financial instruments'
effective for annual periods beginning on or after 1 January 2017
and IFRS 16 'Leases' effective for annual periods beginning on or
after 1 January 2019.
The Group is in the process of assessing the impact that the
application of these standards and interpretations will have on the
Group's financial statements.
Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
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.
Change in subsidiary ownership and loss of control
Changes in the Group's interest in a subsidiary that do not
result in a loss of control are accounted for as equity
transactions.
Where the Group loses control of a subsidiary, the assets and
liabilities are derecognised along with any related NCI and other
components of equity. Any resulting gain or loss is recognised in
profit or loss. Any interest retained in the former subsidiary is
measured at fair value when control is lost.
Joint arrangements
A joint arrangement is an arrangement over which the Group and
one or more third parties have joint control. These joint
arrangement are in turn classified as:
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- Joint ventures whereby the Group has rights to the net assets
of the arrangement, rather than rights to its assets and
obligations for its liabilities; and
- Joint operations whereby the Group has rights to the assets
and obligations for the liabilities relating to the
arrangement.
Associates
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.
Application of the equity method to associates and joint
ventures
Associates and joint ventures 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 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 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.
Joint operations
Where the Group is a party to a joint operation, the
consolidated financial statements include the Group's share of the
joint operations assets and liabilities, as well as the Group's
share of the entity's profit or loss and other comprehensive
income, on a line-by-line basis.
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 Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategy and Business Model on pages [5-6.] In
addition, notes 19 and 20 set out the Group's objectives, policies
and processes for managing its capital and exposures to credit and
liquidity risk.
As highlighted in note 20, the Group meets its day to day
working capital requirements through cash generated from operations
and borrowings. Current cash headroom totals GBP4.8m.
The Group's forecasts and cash projections, taking account of
reasonably possible changes in trading performance as a result of
the uncertain economic conditions, show that the Group should be
able to operate within its cash reserves.
Additional focus has been placed on cash flow management to
ensure sufficient funding is in place to deliver our growth
strategy. The Board have reviewed cash flow projections under a
number of scenarios relating to the pace of store rollout and
potential performance outcomes of those stores and have a
reasonable expectation that the company and group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing the annual report and accounts.
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.
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 estimated useful 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 3-15 Years Straight Line Basis
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
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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 and an allocation of
production overheads. 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 mainly 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, which is the time of retail sale to
the customer. 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.
The Group does not receive any form of rebate from
suppliers.
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.
Lease incentives are recognised in the income statement on a
straight-line basis over the term of the associated lease.
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
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 Chief
Executive Officer 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.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial information in conformity with
IFRS required management to make judgements, estimated and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expense. 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:
-- Share based payments (note 17)
-- Deferred tax (note 13)
-- Intangible assets in business combinations (note 10 and note 24)
Share based payments
The Group issues equity settled share based payments to certain
employees. Equity settled share based payments are measured at fair
value (excluding the effect of non-market based vesting conditions)
at the date of the grant. The fair value determined at the grant
date of such equity settled share based payments is expensed on a
straight line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest and adjusted for the
effect of non-market based vesting conditions (with a corresponding
movement in equity).
Fair value is measured by use of the Black-Scholes model. The
expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
The fair value of the shares issued under the new Long Term
Incentive Plan were valued on a discounted cash flow basis in
conjunction with a third party valuation specialist.
2. Other operating income
2016 2015
GBP GBP
----------------------- ------- -------
RGV management charge 12,000 12,000
Other 17,143 6,678
-------------------------- ------- -------
Total 29,143 18,678
-------------------------- ------- -------
The Group charges RGV Refrigeration a management charge each
period for administration services. The Group has an investment in
RGV Refrigeration, which is described further in note 11.
3. Expenses and auditor's remuneration
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Included in operating profit are the following:
2016 2015
GBP GBP
Depreciation of property, plant and equipment (owned) (note 9) 788,906 397,436
Amortisation of intangible assets (note 10) 135,880 34,680
Loss on sale of property, plant and equipment 5,279 4,256
--------------------------------------------------------------------------- --------- --------
Auditor's remuneration:
2016 2015
GBP GBP
------------------------------------------------------------------------ --------- --------
Audit of these financial statements 16,000 15,300
Amounts receivable by the auditors and their associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation 44,000 20,500
Other services relating to taxation 56,000 7,100
Vat related and other Advisory services 7,000 26,150
--------------------------------------------------------------------------- --------- --------
Total auditors' remuneration 123,000 69,050
--------------------------------------------------------------------------- --------- --------
4. 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
-------------
2016 2015
------------ ------ -----
Management 5 5
Other 447 291
--------------- ------ -----
452 296
------------ ------ -----
The aggregate payroll costs of these persons were as
follows:
2016 2015
GBP GBP
----------------------- ---------- ----------
Wages and salaries 8,832,759 5,038,156
Social security costs 489,010 417,870
Other pension costs 56,044 56,044
-------------------------- ---------- ----------
9,377,813 5,512,070
----------------------- ---------- ----------
5. Key management compensation
2016 2015
GBP GBP
------------------------------------------------------- -------- --------
Wages and salaries 721,008 362,531
Company contributions to money purchase pension plans 40,000 56,044
---------------------------------------------------------- -------- --------
The Group considers key management personnel as defined in IAS24
'Related Party Disclosures' to be the Directors of the Group. The
aggregate of emoluments and amounts receivable under long term
incentive schemes of the highest paid Director was GBP305,239
(2015: GBP127,916). No company pension contributions were made on
his behalf. The highest paid Director changed in the year. The
highest paid Director in 2015 received pension contributions of
GBP40,833.
Number of
Directors
-------------
2016 2015
------------------------------------------------------------------------------ ------ -----
Retirement benefits are accruing to the following number of Directors under:
Money purchase schemes 1 2
--------------------------------------------------------------------------------- ------ -----
6. Finance and income expense
2016 2015
GBP GBP
------------------------ ------- -------
Bank interest received 19,576 48,365
--------------------------- ------- -------
Finance income 19,576 48,365
--------------------------- ------- -------
Bank interest paid 1,914 6,233
--------------------------- ------- -------
Finance expenses 1,914 6,233
--------------------------- ------- -------
7. Income tax expense
Recognised in the income statement
The income tax expense is based on the estimated effective rate
of taxation on trading for the period and represents:
2016 2015
GBP GBP
------------------------------------------------ ---------- ---------
Current tax 16,571 206,772
Adjustments for prior year (141,711) (40,093)
--------------------------------------------------- ---------- ---------
(125,140) 166,679
Deferred tax:
Origination and reversal of timing differences (14,122) 84,710
Adjustments for prior year 64,051 48,415
Effect of rate change - -
------------------------------------------------ ---------- ---------
49,929 133,125
------------------------------------------------ ---------- ---------
Income tax (credit)/expense (75,211) 299,804
--------------------------------------------------- ---------- ---------
Reconciliation of effective tax rate
2016 2015
GBP GBP
---------------------------------------------- ---------- ----------
(Loss)/profit for the period (269,404) 894,594
Total Tax Expense (75,211) 299,804
------------------------------------------------- ---------- ----------
Loss/(profit) excluding taxation (344,615) 1,194,398
Tax using UK Corporation tax rate of 23.167% (69,499) 254,801
Non-deductible expenses 70,248 42,326
Adjustment in respect of prior years (77,660) 8,323
Tax not at standard rate 1,700 (5,646)
Total tax (credit)/expense (75,211) 299,804
------------------------------------------------- ---------- ----------
Adjustments for the prior year include a tax rebate of
GBP148,000 due to an increased capital allowance claim following a
review of our classification of capital spend. The principles
agreed at this review will apply to our future capital
investments.
The movement in deferred tax in the period includes the impact
of deferred tax attributable to share based payments (note 17).
Reductions in the UK corporation tax rate from 20% to 19%
(effective from 1 April 2017) and to 18% (effective from 1 April
2020) were substantively enacted in November 2015. A further rate
reduction to 17% (to be effective from 1 April 2020) was announced
in the March 2016 Budget and is expected to be substantively
enacted later this year.
This will reduce the Company's future current tax charge
accordingly and reduce the deferred tax asset at 31 January 2016
which has been calculated based on the rate of 18% in line with the
above.
8. 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
78,845,870 (31 January 2015: 68,556,045).
The calculation of the basic and diluted earnings per share is
based on the following data:
2016 2015
Earnings GBP GBP
---------------------------------------------- ----------- -----------
(Loss)/Earnings attributable to shareholders (269,404) 894,594
------------------------------------------------- ----------- -----------
2016 2015
Number of shares No. No.
---------------------------------------------- ----------- -----------
Basic weighted average number of shares 78,845,870 68,556,045
Dilutive potential ordinary shares - -
---------------------------------------------- ----------- -----------
Total 78,845,870 68,556,045
------------------------------------------------- ----------- -----------
Earnings per share 2016 2015
---------------------------------------------- ----------- -----------
Basic (0.342) 1.305
------------------------------------------------- ----------- -----------
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In both years the share options were anti-dilutive due to:
- For 2016 the Group reported a loss for the year.
- For 2015 the options were out of the money.
9. Property, plant and equipment
Land and Buildings
------------------------
Plant,
Assets Leasehold equipment
under
construction Freehold improvements and vehicles Total
GBP GBP GBP GBP GBP
---------------------------------- ------------- --------- ------------- ------------- -----------
Cost
Balance at 1 February 2015 79,500 815,379 4,706,185 2,087,608 7,688,672
Additions at cost 345,483 - 278,366 1,641,506 2,265,355
Additions on acquisition - - 78,664 620,412 699,076
Disposals - - - (23,760) (23,760)
Transfer (79,500) - - 79,500 -
---------------------------------- ------------- --------- ------------- ------------- -----------
Balance at 31 January 2016 345,483 815,379 5,063,215 4,405,266 10,629,343
---------------------------------- ------------- --------- ------------- ------------- -----------
Depreciation and impairment
Balance at 1 February 2015 - 149,057 1,358,323 818,055 2,325,435
Depreciation charge for the year - 59,440 265,799 463,667 788,906
Depreciation on acquisition - - 64,140 279,808 343,948
Disposals - - - (12,939) (12,939)
---------------------------------- ------------- --------- ------------- ------------- -----------
Balance at 31 January 2016 - 208,497 1,688,262 1,548,591 3,445,350
---------------------------------- ------------- --------- ------------- ------------- -----------
Net book value
At 31 January 2016 345,483 606,882 3,374,953 2,856,675 7,183,993
---------------------------------- ------------- --------- ------------- ------------- -----------
At 31 January 2015 79,500 666,322 3,347,862 1,269,553 5,363,236
---------------------------------- ------------- --------- ------------- ------------- -----------
There are no items of property, plant and equipment in the
Company.
9. Property, plant and equipment continued
Prior year
Land and Buildings
------------------------
Plant,
Assets Leasehold equipment
under
construction Freehold improvements and vehicles Total
GBP GBP GBP GBP GBP
---------------------------------- ------------- --------- ------------- ------------- ----------
Cost
Balance at 1 February 2014 40,745 815,379 3,472,805 1,833,169 6,162,098
Additions at cost 79,500 - 1,192,635 287,258 1,559,393
Addition on acquisition - - - 48,022 48,022
Disposals - - - (80,841) (80,841)
Transfer (40,745) - 40,745 - -
---------------------------------- ------------- --------- ------------- ------------- ----------
Balance at 31 January 2015 79,500 815,379 4,706,185 2,087,608 7,688,672
---------------------------------- ------------- --------- ------------- ------------- ----------
Depreciation and impairment
Balance at 1 February 2014 - 110,508 1,149,074 732,457 1,992,039
Depreciation charge for the year - 38,549 209,249 149,638 397,436
Disposals - - - (64,040) (64,040)
---------------------------------- ------------- --------- ------------- ------------- ----------
Balance at 31 January 2015 - 149,057 1,358,323 818,055 2,325,435
---------------------------------- ------------- --------- ------------- ------------- ----------
Net book value
At 31 January 2015 79,500 666,322 3,347,862 1,269,553 5,363,237
---------------------------------- ------------- --------- ------------- ------------- ----------
At 31 January 2014 40,475 704,871 2,323,731 1,100,712 4,170,059
---------------------------------- ------------- --------- ------------- ------------- ----------
10. Intangible assets
Other
intangibles Goodwill Brand Total
GBP GBP GBP GBP
----------------------------------------------------- ------------ ----------- -------- -----------
Group
Cost or deemed cost
----------------------------------------------------- ------------ ----------- -------- -----------
At 1 February 2015 214,247 7,205,958 693,558 8,113,763
Assets Acquired Gabbotts Farm Limited (See Note 25) 151,000 3,383,705 - 3,534,705
------------------------------------------------------ ------------ ----------- -------- -----------
Balance at 31 January 2016 365,247 10,589,663 693,558 11,648,468
------------------------------------------------------ ------------ ----------- -------- -----------
Amortisation and impairment
At 1 February 2015 214,247 - 270,211 484,458
Amortisation charge for the year 101,200 - 34,680 135,780
------------------------------------------------------ ------------ ----------- -------- -----------
Balance at 31 January 2016 315,447 - 304,891 620,338
------------------------------------------------------ ------------ ----------- -------- -----------
Net book value
At 31 January 2016 49,800 10,589,663 388,667 11,028,130
------------------------------------------------------ ------------ ----------- -------- -----------
At 31 January 2015 - 7,205,958 423,347 7,629,305
------------------------------------------------------ ------------ ----------- -------- -----------
Prior year
Other
intangibles Goodwill Brand Total
GBP GBP GBP GBP
---------------------------------- ------------ ---------- -------- ----------
Group
Cost or deemed cost
---------------------------------- ------------ ---------- -------- ----------
At 31 January 2014 214,247 7,028,657 693,558 7,936,462
Additions from Acquisitions - 177,301 - 177,301
----------------------------------- ------------ ---------- -------- ----------
Amortisation and impairment
At 1 February 2014 214,247 - 235,531 449,778
Amortisation charge for the year - - 34,680 34,680
----------------------------------- ------------ ---------- -------- ----------
Balance at 31 January 2015 214,247 - 270,211 484,458
----------------------------------- ------------ ---------- -------- ----------
Net book value
At 31 January 2015 - 7,205,958 423,347 7,629,305
----------------------------------- ------------ ---------- -------- ----------
At 31 January 2014 - 7,028,657 458,027 7,486,684
----------------------------------- ------------ ---------- -------- ----------
There are no intangible assets within the Company.
Goodwill is tested for impairment annually.
Acquired brand values were calculated using the royalty relief
approach and are amortised over 20 years. The remaining
amortisation period is eleven years and two months.
The amortisation and impairment charge is recognised in the
following line items in the consolidated statement of comprehensive
income:
2016 2015
GBP GBP
------------------------- -------- -------
Administrative expenses 135,880 34,680
---------------------------- -------- -------
Impairment testing
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Goodwill arose on the Group's original acquisition of Crawshaw
Butchers Limited and on the subsequent acquisitions of East
Yorkshire Beef Limited in June 2014 and Gabbotts Farm Limited in
April 2015. The carrying value of goodwill is allocated against the
stores which were trading in each business at the time of
acquisition.
Each store is treated as a separate cash generating unit with
the stores trading in each business at the time of acquisition
defined as the 'relevant group of CGUs' for the purposes of
impairment testing.
The goodwill supported by the expected future cash flows of each
relevant group of CGUs as at 31 January 2016 is as follows:
2016 2015
GBP GBP
-------------------------------------------- ---------- ----------
Crawshaw Butchers Limited (at acquisition) 7,028,657 7,028,657
East Yorkshire Beef Limited 177,301 177,301
Gabbotts Farm Limited 3,383,705 -
----------------------------------------------- ---------- ----------
The recoverable amount of Crawshaw Butchers Ltd, East Yorkshire
Beef Limited and Gabbotts Farm Limited acquisition has been
calculated with reference to their value in use. The Group prepares
cash flow forecasts derived from the most recent financial budgets
and projections approved by management for the next five years and
assuming an estimated long term annual growth rate of 2.0% for the
subsequent 25 years (2015: 2.0%).
The financial budgets and projections are based on past
experience and actual operating results. The growth rates for the
five year period are based on current performance of the existing
store and product mix. The Directors believe that the long-term
growth rate does not exceed the average long-term growth rate for
the UK economy, the principal geographic area in which Crawshaws
operates.
The Directors estimate the discount rates using the post-tax
rates that reflect the current market assessments of the time value
of money and the risks specific to the cash-generating unit. In the
current year the Directors estimate the applicable pre-tax rate to
be 13.3% (2015: 15.0%).
The Directors modelled a range of different scenarios by
applying sensitivities to both the cash flow assumptions and the
discount rate. Based on the sensitivity analysis there is
significant headroom between the value in use calculation and the
carrying value of the CGU.
11. Investments in equity accounted investees
Group Group
2016 2015
GBP GBP
------------------------------------------ -------- --------
Non-current
Investment in equity accounted investees 125,444 106,424
--------------------------------------------- -------- --------
Other investments comprise a 50% share in RGV Refrigeration, a
joint venture between Crawshaw Butchers Limited and Mr M Hornsby.
The principal place of business for RGV Refrigeration is Unit 4,
Sandbeck Way, Hellaby Industrial Estate, Rotherham S66 8QL. The
last year end being 30 September 2015. The Group does not exert
control over the entity.
The carrying value of investments in equity accounted investees
includes GBP19,020 (2015: GBP26,424) of outstanding dividend
declared by RGV Refrigeration.
12. Other investments
Company Company
2016 2015
GBP GBP
--------------------------------------- ----------- -----------
Non-current
Investment in Crawshaw Butchers Ltd 12,047,000 11,700,000
Investment in East Yorkshire Beef Ltd 246,500 246,500
Investment in Gabbotts Farm Ltd 4,278,001 -
--------------------------------------- ----------- -----------
Total 16,571,501 11,946,500
------------------------------------------ ----------- -----------
13. Deferred tax liabilities
Recognised deferred tax liabilities
Deferred tax liabilities are attributable to the following:
Group Group
liabilities liabilities
2016 2015
GBP GBP
--------------------------- ------------ ------------
Plant and equipment 549,564 450,777
Intangible assets - brand 68,211 82,726
Temporary Differences - (1,523)
------------------------------ ------------ ------------
617,775 531,980
--------------------------- ------------ ------------
Movement in deferred tax during the year
Recognised
31 January Acquired in income 31 January
in
2015 the current 2016
period year
GBP GBP GBP GBP
---------------------------------------------------- ----------- --------- ----------- -----------
Plant and equipment 450,777 36,066 62,721 549,564
Deferred tax relating to intangible assets - brand 82,726 (14,515) 68,211
Temporary differences (1,523) 1,523 -
----------------------------------------------------- ----------- --------- ----------- -----------
531,980 36,066 49,729 617,775
---------------------------------------------------- ----------- --------- ----------- -----------
14. Inventories
Group Group
2016 2015
GBP GBP
---------------- ---------- --------
Finished goods 1,013,452 640,400
------------------- ---------- --------
Finished goods recognised as cost of sales in the year amounted
to GBP20,356,001 (2015: GBP13,698,483).
15. Trade and other receivables
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
-------------------------------------- -------- -------- ---------- ----------
Trade receivables 54,232 167,517 - -
Other tax and social security 74,454 452 - -
Prepayments and accrued income 463,030 315,431 - 25,289
Amounts owed from group undertakings - - 2,733,367 6,562,604
Corporation tax recoverable 134,440 - 51,022 78,213
--------------------------------------- -------- -------- ---------- ----------
726,156 483,400 2,784,389 6,666,106
-------------------------------------- -------- -------- ---------- ----------
The Directors consider that the carrying amount of trade and
other receivables approximates their fair value.
Aged analysis of trade receivables
31 January 2016 31 January 2015
-------------------------------------- --------------------------------------
Provision Provision
Gross for Net Gross for Net
doubtful trade doubtful trade
receivables debt receivables receivables debt receivables
GBP GBP GBP GBP GBP GBP
------------------------ ------------ ---------- ------------ ------------ ---------- ------------
Not past due 30,102 - 30,102 137,282 - 137,282
Up to 1 month past due 33,152 (9,022) 24,130 24,628 (2,199) 22,429
Over 1 month past due 3,141 (3,141) - 17,770 (9,964) 7,806
------------------------ ------------ ---------- ------------ ------------ ---------- ------------
66,395 (12,163) 54,232 179,680 (12,163) 167,517
------------------------ ------------ ---------- ------------ ------------ ---------- ------------
Provision for doubtful debt GBP
------------------------------ ---------
Provision at 31 January 2015 (12,163)
Created during the year 9,022
Utilised during the year -
Released during the year (9,022)
---------------------------------- ---------
Provision at 31 January 2016 (12,163)
---------------------------------- ---------
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16. Trade and other payables
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
------------------------------ ---------- ---------- -------- --------
Current:
Trade payables 3,019,126 1,735,848 - -
Other creditors and accruals 1,306,443 588,906 104,408 6,145
Corporation Tax - 213,025 - -
------------------------------ ---------- ---------- -------- --------
4,325,569 2,537,779 104,408 6,145
------------------------------ ---------- ---------- -------- --------
Non-current:
Accruals 279,088 272,265 - -
------------------------------- ---------- ---------- -------- --------
279,088 272,265 - -
------------------------------ ---------- ---------- -------- --------
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 and rent
free periods, which are credited to the income statement on a
straight-line basis over the lease term.
17. 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:
2016 2015
GBP GBP
----------------------------- ------ ------
Defined contribution scheme 1,595 1,595
-------------------------------- ------ ------
Share Based Payments
Share Options
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 six 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
Number of
of options
options at
at Granted Exercised Lapsed 31
Exercise 1 Feb in in in Jan
Date granted price 2015 period period period 2016 Exercise period
---------------- --------- --------- -------- ---------- -------- --------- ---------------------------
14 April 2008
14 April 2008 42.5p 823,528 - (117,647) - 705,881 to 14 April 2018
9 July 2015 59.5p - 140,335 - - 140,335 9 July 2015 to 9 July 2025
4 January 2016
4 January 2016 82.5p - 72,727 - - 72,727 to 4 January 2026
---------------- --------- --------- -------- ---------- -------- --------- ---------------------------
During the year the Group recognised a charge of GBP12,592
(2015: GBPnil) in relation to equity settled share options in the
income statement.
Long term incentive plan
Shares were granted under the Crawshaw Group Plc Long-Term
Incentive Plan on 24 April 2015 which entitles employees to equity
instruments in Crawshaw Butchers Limited. The shares are 'growth
shares' in a subsidiary, Crawshaw Butchers Ltd, but have value
linked to the market capitalisation of Crawshaw Group Plc.
Shareholders are entitled to a maximum pool of 10% of the growth in
value of the market capitalisation of Crawshaw Group Plc over the
hurdle rate, where the hurdle rate is set as a premium of 15% to
market capitalisation immediately prior to the award of the
shares.
Shareholders have the option to "put" their Eligible Put Shares
on the occurrence of the following events:
- The First and Second Put Dates: Shareholders can put 1/6th of
their Shares from the first anniversary of the date of grant and a
further 1/6th of their Shares from the second anniversary of the
date of grant.
- The achievement of the Performance Conditions: Shareholders
can put 1/3rd of their Shares once the market capitalisation of
Crawshaw Butchers has increased by 50% since the date of grant. In
addition, shareholders can put a further 1/3rd of their Shares once
the market capitalisation of Crawshaw Butchers has increased by
100% since the date of grant.
- On a voluntary winding up or change of control of Crawshaw Group Plc.
The fair value of the awards is determined by using the Monte
Carlo model and allowance has been made for the following
assumptions: Expected exercise date, expected volatility of total
shareholder return, expected future dividends and the risk free
rate of interest. 100,000 simulations were used in the Monte Carlo
model and set out below is a summary of the key data.
Date of Grant 24 April 2015
Ave Share price in period prior to grant 53.1p
Volatility of TSR for the Company 60% pa
Dividend Yield 1% pa
Risk Free rate of Interest 1.75% pa
Exercise pattern Uniform from 2 to 10 years or when performance condition met
if later
---------------------------------------------- --------------------------------------------------------------
The expected Volatility is wholly based on the historic
volatility simulated over differing time periods to the date of
grant.
The share based payment charge will be adjusted each financial
year to reflect expected and actual achievement of non-market based
vesting conditions. The total expense for the period between 24
April and 31 January 2016, is GBP347,000.
The total share based payment charge recognized in the Statement
of Comprehensive Income is GBP359,592 being GBP12,592 for the share
option schemes in operation and GBP347,000 for the long term
incentive plan.
18. Loans and borrowings - Group
2016 2015
GBP GBP
-------------- ------- -----
Hire Purchase 72,709 -
-------------- ------- -----
19. Financial instruments
The Group's principal financial instruments comprise 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 has paid all bank facilities mitigating any risk in
interest rate variability.
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 a provision for 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
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
objective is to maintain a balance between continuity of funding
and flexibility through the use of cash and bank facilities. The
cash generative nature of the business is forecast to continue and
the bank facilities have been paid in full. The Directors are
confident that there will continue to be sufficient headroom to
cover liquidity risk.
The following are the contractual maturities of financial
liabilities, including estimated interest payments and excluding
the effect of netting agreements:
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Contractual Cash Flows
2016 2015
--------------------- ---------------------
1 year 1 year 1 year 1 year
or less or more or less or more
GBP GBP GBP GBP
-------------------------------------- ---------- --------- ---------- ---------
Non-derivative financial liabilities
Secured bank loans - - - -
Finance lease liabilities 37,710 34,999 - -
Unsecured bank facility - - - -
Shares classified as debt - - - -
Bank overdrafts - - - -
Trade and other payables 4,325,569 279,088 2,537,779 272,265
--------------------------------------- ---------- --------- ---------- ---------
Total 4,363,279 314,087 2,537,779 272,265
--------------------------------------- ---------- --------- ---------- ---------
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.
5 years
Effective < 1 year 1 to 2 to and over
< 2 years < 5 years
Financial Instrument interest GBP GBP GBP GBP
rate
---------------------- ---------- ---------- ----------- ----------- ---------
Cash 1.0% 4,879,914 - - -
Overdraft - - - - -
---------------------- ---------- ---------- ----------- ----------- ---------
20. Capital management
The capital structure of the Group is a mixture of (i) net cash
made up of cash balances and (ii) equity comprising issued share
capital and reserves as detailed in the Statements of Changes in
Shareholders Equity.
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.
There has been no change in the objectives, policies or
processes with regards to capital management during the periods
ended 31 January 2016 and 31 January 2015.
21. Capital commitments
The Group had no capital commitments at the current and
preceding year ends.
22. Operating leases
Non-cancellable operating lease rentals are payable as
follows:
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
---------------------------- ---------- ---------- -------- --------
Less than one year 1,312,234 802,330 - -
Between one and five years 4,498,363 284,098 - -
More than five years 3,186,420 2,348,439 - -
----------------------------- ---------- ---------- -------- --------
Total 8,997,017 3,434,867 - -
----------------------------- ---------- ---------- -------- --------
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 GBP1,342,318 (2015: GBP943,156) was recognised as an expense
in the income statement in respect of operating leases.
23. 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 5. 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:
2016 2015
GBP GBP
-------------------- ---- ------ --------
Management charges - 200,000
--------------------- ---------- --------
The amount outstanding from subsidiary undertakings to the
Company at 31 January 2016 totalled GBPnil (2015: GBPnil). Amounts
owed to subsidiary undertakings by the Company at 31 January 2016
totalled GBP0 (2015: GBP1,654,289).
The Company has suffered no expense in respect of bad or
doubtful debts of subsidiary undertakings in the year (2015:
GBPnil).
Transactions with jointly controlled entities
Crawshaw Butchers Limited, a subsidiary of the Company, 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:
2016 2015
GBP GBP
------------------------------------------------------------ -------- --------
Amounts received in respect of management charges 12,000 12,000
Amounts paid in respect of repair and maintenance services 98,056 202,129
--------------------------------------------------------------- -------- --------
The amount outstanding from jointly controlled entities to the
Group at 31 January 2016 totalled GBP19,020 (2015: GBP26,424).
Amounts owed joint ventures by the Group at 31 January 2016
totalled GBP27,959 (2015: GBP20,013).
The Group has suffered no expense in respect of bad or doubtful
debts of jointly controlled entities in the year (2015:
GBPnil).
Transaction with other related parties
The Group leases a property owned by The Colin Crawshaw Pension
Scheme for factory facilities and paid rental fee of GBP13,500 in
2016 (2015: GBP13,500). Amounts owed to The Colin Crawshaw Pension
Scheme by the Group at 31 January 2016 totalled GBPnil (2015:
GBPnil).
24. Acquisition
On the 11 April 2015 the Company acquired the entire share
capital of Gabbotts Farm Ltd for a total consideration of GBP4.3
million in cash.
The acquisition has been accounted for under the acquisition
method of accounting. The provisional fair value of net assets
acquired is GBP934,435 Goodwill of GBP3,383,705 has therefore
arisen.
Fair
value
Book adjustments Fair
value value
GBP GBP GBP
--------------------------------- ---------- ------------ ----------
Net assets acquired
Tangible fixed assets 355,128 - 355,128
Intangible assets - 151,000 151,000
----------------------------------- ---------- ------------ ----------
Current assets
Stock 263,384 - 263,384
Debtors 352,308 - 352,308
Cash at bank and in hand 881,379 - 881,379
----------------------------------- ---------- ------------ ----------
Total assets 1,852,199 151,000 2,003,199
----------------------------------- ---------- ------------ ----------
Creditors (997,998) - (997,998)
Deferred tax liability (36,066) (34,700) (70,766)
----------------------------------- ---------- ------------ ----------
Net assets 818,135 116,300 934,435
----------------------------------- ---------- ------------ ----------
Cash consideration 4,318,140
----------------------------------- ---------- ------------ ----------
Goodwill arising on acquisition 3,383,705
----------------------------------- ---------- ------------ ----------
Fair value adjustments were made in respect of acquired
intangible assets and the associated deferred tax impact following
valuation by City Valuation Advistory Ltd.
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The intangible fixed assets acquired relate to the Gabbotts Farm
brand and a 2 year non-compete clause entered into with the
previous owners of Gabbotts Farm Limited. The intangible asset
relating to the Gabbotts farm brand has been fully amortised in the
year following a phased rebranding of the stores to the Crawshaws
fascia. The non-complete element element of the intangible asset
acquired is being amortised over the 2 year term of the
agreement.
The goodwill arising on acquisition arises through the expected
buying synergies of the business combination, the complementary
geographic coverage it affords and the fixed infrastructure that
enables our further expansion into the North West of England.
The acquired business generated a revenue of GBP10m and profit
before tax of GBP0.7m in the post-acquisition period. For the year
ended 31 January 2016 the acquired business generated revenue of
GBP12m and profit before tax of GBP0.8m.
25. Exceptional costs
Exceptional costs are defined as one off costs incurred in the
year which are of a non-recurring nature.
Exceptional costs incurred:
2016 2015
GBP GBP
--------------------------------------------------------------------- -------- -----
Legal and professional fees in relation to Gabbotts Farm acquisition 105,367 -
--------------------------------------------------------------------- -------- -----
26. Subsidiary undertakings
At 31 January 2016 Crawshaw Group PLC had the following
subsidiary undertakings:
Crawshaw Holdings Limited - United Kingdom - Non-trading
subsidiary
Crawshaw Butchers Limited - United Kingdom - Retail Butchers
East Yorkshire Beef Limited - United Kingdom - Retail
Butchers
Gabbotts Farm (Retail) Limited - United Kingdom - Retail
Butchers
Gabbotts Farm Ltd - United Kingdom - Non-trading subsidiary
MeatMart Ltd - United Kingdom - Non-trading subsidiary
The shareholdings were 100% of the subsidiary undertakings'
ordinary and preference shares. Each of the subsidiaries is
included in the consolidated financial statements.
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 Group's Annual Report and Financial Statements for the 52
weeks ended 31 January 2016 were approved on 26 April 2016 and are
expected to be posted to shareholders, along with the Group's
Notice of Annual General Meeting ("AGM") and related form of proxy,
on 17 May 2016. The AGM will be held at 12 noon on Wednesday 29
June at the Company's registered offices, Unit 4, Hellaby
Industrial Estate, Sandbeck Way, Rotherham, S66 8QL.
Further copies will be available to download from the Company's
website at: www.crawshawbutchers.com and will also be available
from the companies office address, as above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UNVVRNKASUAR
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