TIDMSIV
RNS Number : 3220V
St. Ives PLC
01 November 2017
1 November 2017
St Ives plc
2017 Annual Report and Accounts and Notice of AGM
Further to the Company's announcement of its annual results on 3
October 2017, copies of the Annual Report and Accounts 2017 for the
fifty two weeks ended 28 July 2017 ('the Annual Report 2017'), the
Notice of Annual General Meeting of the Company and the Form of
Proxy in relation to the Annual General Meeting ('the Shareholder
Documents') have today been submitted to the National Storage
Mechanism and will shortly be available for inspection at:
www.morningstar.co.uk/uk/nsm
The Shareholder Documents will shortly be available to download
from the Company Policies & Circulars section of the Company's
website, under Investor Relations, at www.st-ives.co.uk.
Hard copies of the above Shareholder Documents have today been
posted to shareholders.
The Company's Annual General Meeting will be held at 11.00 a.m.
on Thursday, 30 November 2017 at One Tudor Street, London EC4Y
0AH.
Additional Information
The following information is extracted from the Annual Report
2017 (page references are to pages in the Annual Report 2017) and
should be read in conjunction with the Company's announcement of
its annual results issued on 3 October 2017. Both documents can be
found at www.st-ives.co.uk and together, constitute the material
required by DTR 6.3.5 to be communicated to the media in unedited
full text through a Regulatory Information Service. This material
is not a substitute for reading the Annual Report 2017 in full.
Principal Risks and Uncertainties
Risk Description Change in Mitigating activities
2017
--------------------- --------------------- ----------------------- -----------------------------
ACQUISITION As businesses Decreased. Stringent selection
STRATEGY are acquired No acquisitions criteria followed
Acquisitions as part were made for pursuing
may not of the Group's during the acquisitions
fit in to strategic course of that fit within
the Group's objectives the year. the Group's strategy
strategic to grow As a result and culture.
direction its Strategic and whilst Detailed due
and may Marketing acquisitions diligence undertaken
fail to segment, remain a using external
deliver it is fundamental strategic advisers. Board
growth and to identify objective strategic reviews
successful businesses in the medium held annually
integration that will term, the to monitor progress
as a result. enhance inherent against the business
the Group's risk rating model to, as
capabilities. is lower necessary, refresh
than in and adapt the
the prior Group's strategy
year. for delivering
growth. Meetings
held with senior
management of
the subsidiaries
to determine
cross-selling
opportunities.
--------------------- --------------------- ----------------------- -----------------------------
ORGANIC Investing Unchanged. Regular discussion
GROWTH in the wrong Organic of strategy at
Organic sectors growth is Board meetings
growth, or territories a key strategic and meetings
including could result objective of representatives
overseas in significant for the from the businesses
expansion, incremental business to develop the
may not costs to and the Group's proposition,
be pursued the Group. risk factors growth opportunities
in the right involved and collaborative
sectors are considered behaviour. Detailed
or territories. to be consistent budgets and three
with the year plans submitted
prior year to the Board
in view for review.
of those
territories
that have
been targeted.
--------------------- --------------------- ----------------------- -----------------------------
SCALABILITY Achieving New risk. Collaboration
Strategic scalability This risk by businesses
Marketing is important has been such as working
businesses within Digital, added as on joint pitches.
may not Data and a key risk Organic growth
have sufficient Insight to the Group of businesses
scale within in order during the through recruitment
their sectors to pursue year following drives and opening
to secure a high growth discussion of new offices.
substantial strategy. by the Board Bringing businesses
customer Whilst included on driving closer together
contracts. as a risk, further under a single
achieving organic senior management
greater growth. team (such as
scalability Whilst the in Data) to achieve
is also residual a greater combined
an opportunity risk has scalable offering.
for the also been Investment in
Group. assessed high growth Strategic
as medium, Marketing businesses
the Board and greater focus
is encouraged on securing longer
by the progress term contracts.
made within
Digital
during the
second half
of the year
in achieving
greater
scalability
and with
the current
trajectory.
--------------------- --------------------- ----------------------- -----------------------------
LEGACY BUSINESSES This could, Increased. Consolidation
Issues arising in the short This risk of businesses
within Marketing term, impact rating has and management
Activation the growth been increased within the Marketing
and Books within the following Activation segment
may distract Strategic the further has created greater
or inhibit Marketing decline synergies with
the Board's segment in Marketing a senior management
focus on if the Board Activation team across the
its strategic encounters led by the segment that
objectives. issues that grocery oversees each
emerge in sector and of the subsidiaries.
other parts the loss Diversification
of the Group. of the HarperCollins away from the
contract grocery retail.
in Books. Further restructuring
Cost mitigation and cost mitigation
has been initiatives.
undertaken.
--------------------- --------------------- ----------------------- -----------------------------
ECONOMY Uncertainty Unchanged. Diversification
Challenging in the economy This risk into markets
economic largely rating was that are capable
conditions associated increased of delivering
may inhibit with Brexit, during the profit growth
growth and could result prior year with an increasing
create uncertainty. in marketing due to the range of marketing
campaigns degree of companies. Diversification
or projects uncertainty through growth
being cancelled in the economy, in the US and
or deferred partly impacted opportunities
at short by Brexit. pursued to open
notice. The Board's overseas offices,
Whilst the view is where client
Group does that the demand warrants
have long risk remains it. Investment
term contracts the same. in a wider range
with clients, of services offered
the level to clients. A
of spend continual review
is predominantly the Group's cost
at the client's base. Secure
discretion more long-term
rather than client relationships
being derived and contracts.
from guaranteed Seek to increase
sales volumes. market share
by investing
in sophisticated
and targeted
sales lead generation.
A regular review
of performance
of all businesses
against their
budgets and implement
timely remedial
action, where
needed.
--------------------- --------------------- ----------------------- -----------------------------
CLIENTS The Group Increased.
Competitive has a variety Whilst the Encourage collaborative
pressure of key clients financial behaviour across
that may in each impact of the Group's businesses
result in of its three these key and create a
the loss business contracts commitment to
of a key segments. has not cross-selling
client. Long-term increased, that will distinguish
relationships the likelihood the Group's marketing
have been of the risk, offering from
fostered and hence its competitors'.
with many the risk Achieve or exceed
of these rating, service level
clients has risen agreements with
over a number due to a clients. Broaden
of years. greater our capabilities,
appetite providing marketing
seen for solutions in
clients support of our
to carry clients' marketing
out full strategies. Avoid
tenders, over reliance
particularly on any single
in the Marketing client. Implement
Activation bespoke propositions
and Books for securing
segments. the renewal of
key client contracts,
providing Group
support where
appropriate.
Conduct client
satisfaction
surveys.
--------------------- --------------------- ----------------------- -----------------------------
EMPLOYEES
A failure Retaining Unchanged. Implement appraisals
to attract, staff is This risk and fulfil training
develop a key priority rating is needs where identified.
and retain for the consistent Develop a collaborative
employees Group as with the culture across
with the it continues prior year. the Group's businesses.
necessary to invest Operate discretionary
talent for in new and share-based incentive
our businesses. existing schemes, and
service other benefits.
orientated Pay part of consideration
businesses. in shares to
vendor directors
of acquired businesses,
with 'lock-in'
obligations.
--------------------- --------------------- ----------------------- -----------------------------
FINANCING
The Group's Being able Unchanged. Conduct 'going
ability to finance This inherent concern' reviews
to trade working risk is and longer-term
may be compromised capital consistent viability assessments
by lack and carry with prior twice yearly;
of cash out operations years. The continually monitor
funds. is fundamental bank facility the Group's performance
to the Group. runs up against its banking
to 23 March covenants. Undertake
2019; further monthly reviews
details of working capital,
are provided cash forecasts
on page and headroom
104. on banking covenants.
Periodically
Following review the Group's
the January financial KPIs
2017 trading with its bankers.
update,
the residual
risk rating
was increased
from low
to medium
at the Half
Year. The
risk has
since been
further
mitigated
by the disposal
of two freehold
properties
for net
proceeds
totalling
GBP9.8m,
resulting
in the leverage
covenant
reducing
to 1.6 at
the year
end (see
page 112).
--------------------- --------------------- ----------------------- -----------------------------
PENSION
SCHEME
The volatility The volatility Unchanged. Agree deficit
of the St of the Scheme's This risk recovery plan
Ives Defined deficit rating associated with the Pension
Benefits is impacted with the Scheme Trustee.
Pension by the inflation Scheme's Regularly engage
Scheme (the rate, changes deficit the Trustee directors
'Scheme') in the discount remains in discussions
deficit. rate derived high. The on the Group's
from gilt deficit performance.
yields and had increased Manage possible
changes in recent Section 75 debts
in actuarial years primarily arising from
assumptions, due to low business disposals
such as interest and closures.
mortality. rates. As Contribute to
at 28 July discussions on
2017, the the Scheme's
deficit investment strategy.
has reduced Proactively seek
due to a to limit the
higher level growth in the
of return pension liability.
on the Scheme's
assets.
--------------------- --------------------- ----------------------- -----------------------------
REPUTATIONAL
Exposure Health and Unchanged. Ingrain robust
to reputational safety is This risk health and safety
or financial a pre-eminent rating is culture throughout
damage due priority consistent the Group, supported
to accident, for the with the by rigorous health
unethical Board and prior year, and safety and
trading, is discussed reflecting environmental
non-compliance at each the Board's policies. Monitor
with legislation Board meeting. assessment compliance, measure
or regulation of the associated performance and
or disputes. Other reputational risk impact. investigate major
risks need incidents. Monitor
to be carefully changes in legislation
managed and regulations,
as part take legal advice
of the Group's and provide training
governance where necessary.
procedures. Place a strong
emphasis on compliance
with local taxation
rules by embedding
the Group's processes
and procedures.
Apply the Group's
policies on Ethical
Trading, Share
dealings, Equal
Opportunities,
Dignity at Work
and Whistle-blowing.
Have in place
business continuity
plans and a procedure
for dealing with
'leaks' of inside
information.
--------------------- --------------------- ----------------------- -----------------------------
DATA SECURITY This includes Unchanged. IT functions
Exposure the risk This risk in place around
to reputational of loss was added the Group with
or financial of data, as a key responsibility
damage due sabotage risk for to protect data
to corruption or disruption the Group (e.g. encryption,
or theft to the business, in the prior firewalls, restricted
of fraud, reputation year due access).
company damage, to, in part, Periodic reviews
owned or and possible the new by Internal Audit,
client fines. General utilising in-house
owned data Data Protection IT as well as
or data Regulation specialist external
breaches ("GDPR") consultants.
arising. coming into Cyber security
effect in and IT questionnaire
2018. completed periodically
by subsidiaries
to highlight
areas of potential
risk, together
with any mitigating
actions performed
in order to address
this risk.
The appointment
of a new Data
Protection Officer
for the Group
to assist with
the Group's GDPR
compliance.
--------------------- --------------------- ----------------------- -----------------------------
Related Party Transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this [Annual Report 2017] note. No material related
party transactions have been entered into during the current
period, which might reasonably affect the decisions made by the
users of these financial statements.
No other executive officers of the Company or their associates
had material transactions with the Group during the period.
The Group earned revenue of GBP805,000 from Loop Integration LLC
and the Group incurred GBPNil charges for services received. At the
reporting date, Loop Integration LLC owed the Group GBP26,000.
The total amounts for Directors' remuneration were as
follows:
2017 2016
GBP'000 GBP'000
--------------------- --------- ---------
Short-term employee
benefits 962 926
--------------------- --------- ---------
Post-employment
benefits 95 108
--------------------- --------- ---------
1,057 1,034
--------------------- --------- ---------
Statement of Directors' Responsibilities
The following statement which was prepared for the purposes of
the Annual Report 2017 is repeated here for the purposes of
complying with DTR 6.3.5. It relates to and is extracted from the
Annual Report 2017 and is not connected to the extracted and
summarised information presented in this announcement.
The Director's confirm to the best of their knowledge:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report includes a fair review of the
development, position and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
Signed in accordance with a resolution of the Board of Directors
on 2 October 2017 on its behalf by Matt Armitage, Chief Executive
and Brad Gray, Chief Financial Officer.
Enquiries:
Daniel Fattal 020 7928 8844
Company Secretary
St Ives plc
This information is provided by RNS
The company news service from the London Stock Exchange
END
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