TIDMBRCK
RNS Number : 6910H
Brickability Group PLC
28 November 2022
28 November 2022
Brickability Group PLC
("Brickability" or "the Group")
Interim Results for the six months ended 30 September 2022
Brickability Group PLC (AIM: BRCK), the leading construction
materials distributor, today announces its unaudited interim
results for the six months ended 30 September 2022.
Financial Highlights
-- Revenue increased by 57.8% to GBP352.7m (H1 FY22: GBP223.5m)
-- Group like-for-like* revenue growth of 9.3%
-- Gross profit increased by 40.8% to GBP54.9m (H1 FY22:
GBP39.0m)
-- Profit before tax increased by 71.9% to GBP15.3m (H1 FY22:
GBP8.9m )[1]
-- Adjusted EBITDA** increased by 45.7% to GBP25.5m (H1 FY22:
GBP17.5m) [1]
-- Net debt as at 30 September 2022 of GBP27.4m (H1 FY22:
net cash GBP2.8m)
-- Interim dividend of 1.01 pence per share (H1 FY22: 0.96
pence)
Operational Highlights
-- Strong performance across all Group divisions in first
half of FY23, despite macroeconomic and geopolitical backdrop
-- Continued strong order intake moving into the second half
-- Two acquisitions in period - Modular Clay Products in
May 2022 and ET Clay Products in September 2022
-- Appointment of two additional Independent Non-Executive
Directors, Susan McErlain and Sharon Collins, during the
period
Post Period and Outlook
-- Board remains vigilant of wider macroeconomic challenges
but confident in the Group's ability to deliver performance
in line with market expectations for the full year***
[1] Re-stated (see note 8 of the interim financial
statements)
*like-for-like ("LFL") sales is a measure of growth in sales,
adjusted for the impact of acquisitions.
**Adjusted EBITDA is defined as earnings before interest, tax,
depreciation and amortisation, share option expense, acquisition
costs and exceptional items.
***Full year market expectations as at the date of this
announcement of adjusted EBITDA of approximately GBP44.5
million
John Richards, Chairman, commented:
"The first half of the year has seen the Group benefit from the
earlier strategic decision to move into new market segments within
the construction and housebuilding industries thereby diversifying
and expanding both the Group's product portfolio and end markets.
This, combined with the increase in import and distribution
capacity, has significantly increased the Group's customer base
which has in turn led to sales and profit growth across all four
divisions.
"Whilst the market continues to be impacted by macroeconomic and
geopolitical pressures, the fundamentals of our industry remain
strong, albeit the impact of the current UK economic environment on
our business during 2023 is unclear. However, having built a robust
and increasingly diverse business, we remain confident in the
Group's ability to continue to deliver on its strategy and to meet
market expectations for the full year."
This announcement contains inside information.
Enquiries:
Brickability Group PLC via Montfort Communications
John Richards, Chairman
Alan Simpson, CEO
Mike Gant, CFO
Cenkos Securities plc (Nominated adviser
and broker)
Ben Jeynes, Max Gould (Corporate Finance)
Julian Morse, Alex Pollen (Sales) +44 (0) 207 397 8900
Montfort Communications +44 (0) 203 514 0897
James Olley brickability@montfort.london
Georgia Colkin
About Brickability
Brickability is a leading construction materials distributor,
serving customers across the UK and Europe for over 37 years
through its national and local networks. The Group supplies over
550m bricks annually and has over 55 locations across the country
with over 600 employees.
Brickability Group PLC
Interim Report for the six months ended 30 September 2022
Chairman's Statement
Overview
We are pleased to report a strong set of results for the six
months to 30 September 2022 with the Group delivering a solid
financial performance, achieving an adjusted EBITDA of GBP25.5
million.
Firmly focused on diversifying and driving growth, the Group has
continued to achieve both increased scale and presence within the
construction and housebuilding industries. Brickability's strategic
positioning, underpinned by its differentiated business model and
diverse product mix, has enabled us to successfully identify
opportunities and effectively manage demand, whilst adapting and
responding to market conditions. We continue to operate within a
supportive government regulatory environment and continue to
experience strong demand across the undersupplied construction and
housebuilding sector. Whilst the market continues to be impacted by
macroeconomic and geopolitical pressures, the fundamentals of our
industry remain strong, albeit the impact of current UK economic
environment on our business during 2023 is unclear. However, having
built a robust and increasingly diverse business, with a broad
product portfolio, strong customer relationships, cost discipline
and ability to effectively adapt, we remain confident in the
Group's ability to continue to deliver on its strategy and to meet
market expectations for the full year.
Acquisitions
During the first half of the year, we announced the strategic
acquisition of Modular Clay Products in May 2022 which was followed
by the acquisition of ET Clay Products on 30 September 2022. Both
acquisitions have significantly strengthened our import
capabilities, increasing scale nationally and providing the Group
with access to new suppliers in Europe, with the addition of
Turkey, as well as the United States. Moving forward, we will
continue to look for opportunities to grow the businesses
organically and to capitalise on the synergies created within the
Group.
Board and Environmental, Social and Governance
With the Group's significant expansion in scale and customer
base, it has been important to ensure continued progress is made
not only strategically, but also operationally. During the first
half of the year, the Group strengthened the financial, marketing
and HR departments which have all played a pivotal role in ensuring
the smooth transition, integration and governance of new
acquisitions into the Group and the identification of internal and
external opportunities.
The Board was delighted to announce the appointments of Susan
McErlain and Sharon Collins as Independent Non-Executive Directors
during the period. Both Susan and Sharon have proven to be valuable
additions to the Board, bringing with them a wealth of experience,
helping to support the Group as it performs against its stated
strategy.
As announced at the time of the Group's Preliminary Results in
July 2022, we are acutely aware of the role and responsibility we
have in tackling ESG priorities as Brickability grows. W e remain
committed to continuously developing our environmental, social and
governance strategy, and to identifying additional ways in which
all our businesses and people can make small but significant
changes in the way we operate to lessen our impact on the
environment, as well as taking the time to support local
causes.
Over the last six months the Group has launched several
initiatives including the use of EV and hybrid vehicles within the
Group's fleet, as well as continuing to support charitable
initiatives through The Brickability Group Foundation which has
provided grants, sponsorship match funding, material donations for
community projects, social impact initiatives and humanitarian
appeals.
Interim Dividend
The Board is pleased to announce an interim dividend of 1.01p
per share (H1 FY22: 0.96p), payable on 23 February 2023, reflecting
the performance of the business in the half year and the Board's
confidence in the longer-term outlook for the Group. The
ex-dividend date is 26 January 2023 with associated record date of
27 January 2023.
John Richards
Chairman
25 November 2022
Chief Executive's Review
Our divisions have once again performed well during the first
half of the year with both revenue and profit significantly ahead
of the prior period, reflecting the diversity of the Group and the
strength of Brickability's positioning within the market.
We are pleased to report the Group has experienced a high level
of demand across all businesses, although the availability of some
products has continued to be challenging. In addition, significant
materials price inflation along with fuel surcharges have
substantially contributed to revenue growth during the period.
Group EBITDA margin is lower than the prior year, driven by the
Taylor Maxwell business which operates on lower margins than the
Brickability business prior to the acquisition, and with the prior
year comparator including only three months of post-acquisition
trade of Taylor Maxwell. In addition, timber margins have fallen
back from the exceptional highs of last year and the margins in
some of our businesses have been adversely impacted where we have
not yet been able to immediately pass on all costs attributed to
both materials price inflation and fuel surcharges.
Over the last couple of years, the Group has grown significantly
and we are ensuring we support this growth with recruitment at both
Group and divisional levels together with optimising our processes
through the rollout of standardised IT system platforms across all
businesses. In addition, during the first half of the year, the
Group took the decision to re-align the reporting structure of some
of our businesses and we have moved from three divisions to four in
order to support the continued growth of the Group and to further
improve efficiencies. The Group's four distinct business divisions
are:
-- Bricks and Building Materials - businesses that are primarily
brick, timber and other building materials factors
-- Importing - businesses that primarily source, transport and
distribute bricks and roof tiles from European and other overseas
manufacturers
-- Distribution - businesses that stock and distribute products
such as towel radiators and valves, facia, soffits and guttering,
weatherboard cladding, doors, windows, solar panels and car
chargers
-- Contracting - businesses that supply and fit roofing and flooring
Full details of our divisions and each of our businesses can be
found at https://brickabilitygroupplc.com/
Bricks and Building Materials Division
The Group's largest division, representing c75% of total sales,
grew revenues by 57.3%, 4.3% LFL during the period. Despite supply
issues from both UK and European manufacturers, brick volumes in
the period were comparable with the prior year on a LFL basis
against a strong comparator, with price increases and mix being the
driver of LFL revenue growth. In line with our expectations, timber
volumes and pricing have fallen back following the exceptional
highs of H1 FY22. The EBITDA margin of the division has diluted in
the first half compared to the prior period due to the impact of
Taylor Maxwell businesses as noted above.
Taylor Maxwell's operational and scheduling systems have been
successfully implemented into two more of the Group's businesses
with further businesses to be transitioned during the second half
of the year. The Group is also transitioning to a single financial
accounting system and this has also been implemented alongside the
scheduling system in the two aforementioned businesses.
In June 2022 we entered a new, long-term strategic partnership
with Thyssenkrupp Materials UK to develop a new balcony system to
produce the next generation of balconies that will improve lead
times and reduce time spent on-site, whilst providing exceptional
curb appeal and functionality. The patented design has passed the
testing stage and we expect to launch the system in the beginning
of the new calendar year.
Importing Division
Importing Division revenue increased by 68.4% in the first half
including Modular Clay Products which was acquired on 31 May 2022.
Since acquisition Modular Clay Products has performed strongly and,
adjusting for this acquisition, LFL Importing Division revenue
increased by 51.4% reflecting our expertise in sourcing and our
strong relationships with overseas manufacturers. McCann Logistics
has seen significant growth in revenue following the increase in
its trailer fleet and expansion of its operations to cover haulage
from the Netherlands, Germany, France, Spain, Belgium, and
Portugal.
Contracting Division
Revenue in the first half grew by 89.2% including Beacon Roofing
which was acquired on 31 March 2022 and has performed very well
since this time. Adjusting for this acquisition, LFL revenue
increased by 18.2%. Margins are beginning to improve from the
impacts of the unprecedented number and level of price increases in
roof tiles experienced last year. It has been a busy period for the
Contracting Division, and we have won a number of new contracts
from a competitor who has recently entered administration and the
Division continues to work with our Group colleagues at Upowa to
explore opportunities to install solar panels.
Distribution Division
Revenue in the first half grew by 50.2% in the Distribution
Division and 35.8% LFL. Towelrads continues to grow strongly and
Fraser Simpson almost doubled revenues during in the period
compared to H1 FY22. Upowa, our renewable energy products business
that was acquired in November 2021 has won multiple significant
national housebuilder contracts which have commenced installation
and are expected to scale up from Q2 FY24. The new EV car charger
which has been developed exclusively for the Group, with the
installer and end user in mind, is expected to be launched in the
first quarter of the new calendar year.
Continental Tile Joint Venture
In March 2022 the Group announced the formation of the
Schermbecker Building Products GmbH joint venture operating from a
factory in Germany in connection with a leading German tile
manufacturer and producer of roofing materials. Initial manufacture
and start-up production of clay roof tiles by the joint venture was
very good but as a result of volatility of energy prices in
Germany, we expect that the commissioning of the new capital
investment by the joint venture will now be completed during spring
2023, at which point we will be able to commence production of clay
roof tiles much needed by the UK market.
As outlined in the Chairman's Statement, the Group completed the
acquisition of ET Clay Products Limited and Heritage Clay Tiles
Limited (together "ET Clay Products") on 30 September 2022.
Established over 25 years ago, ET Clay Products is a specialist
supplier of UK and imported clay facing bricks and high quality
handmade and handcrafted clay roof tiles. Operating from three
yards, the businesses will bring new customers to the Group,
particularly in the merchant's channel, further diversifying the
Group's customer and revenue base.
Summary
Brickability has continued to demonstrate its ability to deliver
upon its strategic objectives and remains committed to growing the
business in a sustainable manner.
Alan J Simpson
Chief Executive
25 November 2022
Financial Review
Revenue and gross margin
The Group delivered revenue of GBP352.7 million in the first six
months of H1 FY23 (H1 FY22: GBP223.5 million), representing a total
increase of 57.8% (GBP129.2 million). When the impact of
acquisitions is excluded from revenue, like for like ("LFL")
revenue increased by 9.3% when compared to H1 FY22.
The increase in LFL revenue largely reflects the general
increase in prices across the industry. The increase in the Bricks
and Building Materials division, however, is at a lower level than
the other divisions due to the volatility in the timber market
which has seen an expected fall in prices.
Revenue by division was:
H1 FY23 H1 FY22 LFL
GBP'000 GBP'000 % Increase % increase
===================== ========== ========== ============= =============
Bricks and Building
Materials 270,101 171,713 57.3% 4.3%
===================== ========== ========== ============= =============
Importing 54,125 32,134 68.4% 51.4%
===================== ========== ========== ============= =============
Distribution 31,041 20,666 50.2% 35.8%
===================== ========== ========== ============= =============
Contracting 19,880 10,505 89.2% 18.2%
===================== ========== ========== ============= =============
Group eliminations (22,478) (11,515) 95.2%
===================== ========== ========== ============= =============
Total 352,669 223,503 57.8% 9.3%
===================== ========== ========== ============= =============
Gross profit for the 6 months increased by 40.8% to GBP54.9
million (H1 FY22: GBP39.0 million) whilst the Group's gross margin
percentage decreased to 15.6% (H1 FY22: 17.4%). This has been
driven primarily by the acquisition of the Taylor Maxwell business
during the prior year, which has traditionally operated on lower
margins than the original Brickability Group, together with the
normalisation of timber margins and inflationary pricing pressures
in the market.
Adjusted profit and adjusted EBITDA
Statutory profit before tax of GBP15.3 million (H1 FY22: GBP8.9
million) includes other items of GBP7.1 million (H1 FY22: GBP6.8
million) which are largely acquisition related and not considered
reflective of the Group's underlying trading operations. These are
analysed below the Condensed Consolidated Statement of Profit or
Loss and Other Comprehensive Income.
The Group's adjusted EBITDA increased by 45.7% to GBP25.5
million for the first six months of FY23 compared to GBP17.5
million in the same period last year. EBITDA as a percentage of
turnover has fallen slightly to 7.2% (H1 FY22 : 7.8%, FY 2022:
7.6%) due mainly to the impact of the of the Taylor Maxwell
business as noted above.
Adjusted EBITDA by division was:
H1 FY23 H1 FY22
EBITDA EBITDA
H1 FY23 as % H1 FY22 as %
GBP'000 turnover GBP'000 turnover
===================== ========== =========== ========== ===========
Bricks and Building
Materials 15,704 5.8% 11,261 6.6%
===================== ========== =========== ========== ===========
Importing 5,424 10.0% 3,151 9.8%
===================== ========== =========== ========== ===========
Distribution 4,953 16.0% 3,918 19.0%
===================== ========== =========== ========== ===========
Contracting 2,565 12.9% 949 9.0%
===================== ========== =========== ========== ===========
Central (3,112) - (1,752) -
===================== ========== =========== ========== ===========
Total 25,534 7.2% 17,527 7.8%
===================== ========== =========== ========== ===========
Profit before tax
Profit before tax for the period was GBP15.3 million (H1 FY22:
GBP8.9 million). Comparative results to 30 September 2021 have been
restated, following completion of the fair value assessment of
consideration and net assets acquired through business combinations
shortly before the period end.
The decrease of GBP3.0 million in H1 FY22 profit before tax,
compared to the GBP11.9 million originally reported, primarily
relates to a charge of GBP2.2 million in connection with earn-out
consideration payable for the acquisition of Taylor Maxwell.
Contingent consideration of GBP13.0 million was initially
recognised within goodwill and deferred consideration payable.
However, after review and based on interpretation guidance under
IFRS 3, the earn-out consideration payable is treated as
remuneration costs and recognised as an expense in profit or loss
over the earn-out performance period.
Further details of the prior period restatement are included in
note 8 to the interim financial statements.
Earnings per share
Basic EPS was 3.90 pence per share (H1 FY22: 1.95p restated),
while adjusted basic EPS was 6.00 p per share (H1 FY22: 4.89p
restated). Adjusted EPS is an underlying EPS, based on the adjusted
profit as noted above.
Dividend
The Board is recommending an interim dividend of 1.01p per share
(H1 FY22: 0.96p) to shareholders on the register at 27 January
2023. The ex-date and payment date for the dividend will be 26
January 2023 and 23 February 2023 respectively.
Cash flow and net debt
The Group generated operating cash flows before movements in
working capital of GBP23.7 million in the first six months of the
year compared to GBP15.4 million in the same period in FY22. Cash
generated from operations was GBP6.3 million (H1 FY22: GBP7.0
million).
The net working capital outflow of GBP17.4 million is comprised
of a GBP5.7 million outflow in respect of inventories, trade
receivables and trade payables and GBP11.7 million of accrual
movements and payments, primarily in respect of supplier rebates,
employee bonuses and contingent earn-outs which are timing related
and mostly expected to unwind by the financial year end.
The net debt position (cash less bank borrowings) as at 30
September 2022 was GBP27.4 million compared to a net cash position
as at 30 September 2021 of GBP2.8m, and is an increase of GBP27.0
million since the net cash position at 31 March 2022.
The increase in net debt during the period follows an increase
in working capital requirements of GBP17.4 million (H1 FY22: GBP8.4
million), further investment in property plant and equipment and
intangible assets of GBP5.8 million (H1 FY22: GBP3.6 million), tax
paid of GBP5.0 million (H1 FY22: GBP2.5 million), dividends paid of
GBP6.1 million (H1 FY22: GBP3.2 million), the initial payments for
acquisitions of GBP15.4 million (H1 FY22: GBP39.5 million) and
payment of deferred consideration, in relation to previous
acquisitions, of GBP2.0 million (H1 FY22: GBP0.8 million). Net
proceeds of GBP0.5 million (H1 FY22: GBP52.7 million) were received
in relation to the issue of shares in the period.
Bank facilities
In June 2021, the Group re-financed into a GBP60 million
revolving credit facility with an additional GBP25 million
accordion, on a club basis with HSBC and Barclays, that runs for 3
years (with the option of two one-year extensions). Total bank debt
as at 30 September 2022 was GBP34.1 million with a further GBP25.9
million of undrawn committed facilities available.
Defined benefit pension scheme
The Group acquired a defined benefit pension scheme during the
prior period when it acquired Taylor Maxwell (2017) Limited.
However, it has commenced a buy-out process to transfer the risk
associated with the scheme. A buy-in contract was incepted on 7
July 2021 and the process to reach the full buy-out stage is well
progressed. It is expected that it will be completed within the
next 6 to 12 months.
Subsequent events
In October 2022, the Group granted a total of 4,037,124 options
under its Long Term Incentive Plan (LTIP) to employees, as
previously announced, and in November 2022, the Group purchased a
property for GBP2.3 million.
There are no other material post balance sheet events.
Mike Gant
Chief Financial Officer
25 November 2022
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the six months ended 30 September 2022 (unaudited)
6 months 6 months
ended ended Year ended
30 Sept 30 Sept 31 March
2022 2021 2022
GBP'000 (Restated) (Audited)
Notes GBP'000 GBP'000
======================================================= =================== ===================== ================
Revenue 352,669 223,503 520,169
Cost of sales (297,720) (184,551) (433,366)
=================================================== =================== ===================== ================
Gross profit 54,949 38,952 86,803
Other operating income - - 354
Administrative expenses 5 (37,654) (29,162) (64,096)
=================================================== =================== ===================== ================
Comprising:
Depreciation and amortisation (6,122) (3,992) (9,691)
Other administrative expenses (31,532) (25,170) (54,405)
=================================================== =================== ===================== ================
Impairment losses on financial assets (408) (301) (450)
Finance income 52 27 54
Finance expense (2,253) (503) (2,249)
Share of post-tax profit of equity accounted
associates 91 20 55
Share of post-tax loss of equity accounted
joint ventures (384) - (149)
Fair value gains / (losses) 886 (110) (1,916)
Profit before tax 15,279 8,923 18,406
Tax expense (3,640) (3,798) (6,103)
=================================================== =================== ===================== ================
Profit for the period 11,639 5,125 12,303
======================================================= =================== ===================== ================
Other comprehensive income
Items that will not be reclassified to profit
or loss:
Remeasurements of defined benefit pension schemes 26 (1,987) (1,970)
Deferred tax on remeasurement of defined benefit
pension schemes (5) 378 374
Fair value gain on investments in equity instruments
designated as FVTOCI - - 53
======================================================= =================== ===================== ================
Other comprehensive income for the period 21 (1,609) (1,543)
======================================================= =================== ===================== ================
Total comprehensive income/ (loss) 11,660 3,516 10,760
======================================================= =================== ===================== ================
Profit/ (loss) for the year attributable
to:
===================
Equity holders of the parent 11,661 5,160 12,387
Non-controlling interests (22) (35) (84)
=================================================== =================== ===================== ================
11,639 5,125 12,303
=================================================== =================== ===================== ================
Total comprehensive income/ (loss) attributable
to:
===================
Equity holders of the parent 11,682 3,551 10,844
Non-controlling interests (22) (35) (84)
=================================================== =================== ===================== ================
11,660 3,516 10,760
===================
Earnings per share
==================================== ===== ====== =======
3.90
Basic earnings per share 7 p 1.95 p 4.40 p
==================================== ===== ====== =======
3.83
Diluted earnings per share 7 p 1.92 p 4.32 p
==================================== ===== ====== =======
6.00
Adjusted basic earnings per share 7 p 4.89 p 10.06 p
==================================== ===== ====== =======
5.89
Adjusted diluted earnings per share 7 p 4.80 p 9.86 p
==================================== ===== ====== =======
Adjusted profit
Adjusted profit excludes those items that are not considered to
be directly attributable to the Group's underlying trade. It can be
reconciled to statutory profit after tax as follows:
6 months
ended Year ended
6 months 30 Sept 31 March
ended 2021 2022
30 Sept
2022 (Restated) (Audited)
GBP'000 GBP'000 GBP'000
================================================== ============ ============= ================
Profit for the period 11,639 5,125 12,303
Acquisition costs 171 999 1,139
Re-financing costs - - 97
Earn-out consideration classified as
remuneration under IFRS 3 2,167 2,167 4,333
Share-based payment expense (including
employer NI) 571 880 1,597
Amortisation and impairment of intangible
assets 3,844 2,635 6,349
Unwinding of discount on contingent consideration 1,332 48 938
Share of post-tax profit of equity accounted
associates (91) (20) (55)
Fair value (gains)/ losses on contingent
consideration (886) 110 1,916
Tax on adjusting items (844) 938 (391)
====================================================== ============ ============= ================
Adjusted profit for the period 17,903 12,882 28,226
====================================================== ============ ============= ================
Share of post-tax loss of equity accounted
joint ventures - - 149
Depreciation and amortisation 2,278 1,357 3,342
Finance income (52) (27) (54)
Finance expense 921 455 1,311
Tax expense 4,484 2,860 6,494
====================================================== ============ ============= ================
Adjusted EBITDA 25,534 17,527 39,468
====================================================== ============ ============= ================
Adjusted EBITDA reflects earnings before interest, tax,
depreciation, amortisation and other items considered
non-operational in nature. A reconciliation between adjusted EBITDA
and statutory profit before tax is included in note 5.
Condensed Consolidated Balance Sheet
Six months ended 30 September 2022 (unaudited)
6 months 6 months
ended ended Year ended
30 Sept 30 Sept 31 March
2022 2021 2022
GBP'000 (Restated) (Audited)
Notes GBP'000 GBP'000
================================================== =================== ==================== ==============
Non-current assets
Property, plant and equipment 23,363 15,860 18,555
Right of use assets 12,489 10,576 12,162
Intangible assets 158,895 133,061 150,585
Investments in equity accounted associates 321 241 261
Investments in equity accounted joint ventures 2,600 - 279
Investments in financial assets 178 125 178
Deferred tax assets - 98 -
Trade and other receivables 1,344 491 1,023
================================================== =================== ==================== ==============
Total non-current assets 199,190 160,452 183,043
================================================== =================== ==================== ==============
Current assets
Inventories 36,579 26,807 28,120
Trade and other receivables 131,970 118,788 131,202
Employee benefits 660 833 781
Current income tax assets - - 101
Cash and cash equivalents 6,698 18,389 25,028
============================================== =================== ==================== ==============
Total current assets 175,907 164,817 185,232
================================================== =================== ==================== ==============
Total assets 375,097 325,269 368,275
================================================== =================== ==================== ==============
Current liabilities
Trade and other payables (126,685) (125,162) (140,046)
Current income tax liabilities (756) (1,283) -
Lease liabilities (2,289) (1,825) (2,216)
============================================== =================== ==================== ==============
Total current liabilities (129,730) (128,270) (142,262)
================================================== =================== ==================== ==============
Non-current liabilities
Trade and other payables (21,559) (4,490) (17,717)
Loans and borrowings 10 (33,820) (15,160) (24,240)
Lease liabilities (10,813) (9,233) (10,417)
Provisions (1,413) (1,694) (1,728)
Deferred tax liabilities (16,722) (17,429) (17,427)
Total non-current liabilities (84,327) (48,006) (71,529)
================================================== =================== ==================== ==============
Total liabilities (214,057) (176,276) (213,791)
================================================== =================== ==================== ==============
Net assets 161,040 148,993 154,484
================================================== =================== ==================== ==============
Equity
Called up share capital 2,997 2,982 2,985
Share premium account 102,633 102,134 102,146
Capital redemption reserve 2 2 2
Share-based payment reserve 2,438 832 1,930
Merger reserve 11,146 11,146 11,146
Retained earnings 41,936 31,938 36,365
============================================= ======= ======= =======
Equity attributable to equity holders of the
parent 161,152 149,034 154,574
============================================= ======= ======= =======
Non-controlling interests (112) (41) (90)
============================================= ======= ======= =======
Total equity 161,040 148,993 154,484
============================================= ======= ======= =======
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2022 (unaudited)
Total
attributable
to equity
Share holders
Share premium Capital Share-based Merger Retained of the Non-controlling
capital account redemption payments reserve Earnings parent interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2021 2,305 49,999 2 266 1,245 31,623 85,440 (6) 85,434
============================= ===== ========== ===== ====== ======= ======= ==== =======
Profit for the six
months to 30 September
2021 (as restated) - - - - - 5,160 5,160 (35) 5,125
Other comprehensive
income for the six
months to 30 September
2021 (as restated) - - - - - (1,609) (1,609) - (1,609)
============================= ===== ========== ===== ====== ======= ======= ==== =======
Total comprehensive
income for the period - - - - - 3,551 3,551 (35) 3,516
Dividends paid - - - - - (3,236) (3,236) - (3,236)
Issue of paid shares 578 54,422 - - - - 55,000 - 55,000
Issue of consideration
shares 99 - - - 9,901 - 10,000 - 10,000
Share issue costs - (2,287) - - - - (2,287) - (2,287)
Increase in share-based
payment reserve - - - 566 - - 566 - 566
============================= ===== ========== ===== ====== ======= ======= ==== =======
Total contributions
by and distributions
to owners 677 52,135 - 566 9,901 (3,236) 60,043 - 60,043
============================= ===== ========== ===== ====== ======= ======= ==== =======
At 30 September 2021
(restated) 2,982 102,134 2 832 11,146 31,938 149,034 (41) 148,993
============================= ===== ========== ===== ====== ======= ======= ==== =======
Profit for the six
months to 31 March
2022 - - - - - 7,227 7,227 (49) 7,178
Other comprehensive
income for the six
months to 31 March
2022 - - - - - 66 66 - 66
============================= ===== ========== ===== ====== ======= ======= ==== =======
Total comprehensive
income for the six
months to 31 March
2022 - - - - - 7,293 7,293 (49) 7,244
Dividends paid - - - - - (2,866) (2,866) - (2,866)
Issue of shares on
exercise of share
options 3 12 - - - - 15 - 15
Equity settled share-based
payments - - - 607 - - 607 - 607
Deferred tax on share-based
payment transactions - - - 491 - - 491 - 491
Total contributions
by and distributions
to owners 3 12 -1,098 - (2,866) (1,753) - (1,753)
============================= ===== ========== ===== ====== ======= ======= ==== =======
At 31 March 2022 2,985 102,146 21,930 11,146 36,365 154,574 (90) 154,484
============================= ===== ========== ===== ====== ======= ======= ==== =======
At 1 April 2022 2,985 102,146 21,930 11,146 36,365 154,574 (90) 154,484
============================= ===== ======= ===== ====== ======= ======= ===== =======
Profit for the six
months to 30 September
2022 - - - - - 11,661 11,661 (22) 11,639
Other comprehensive
income for the six
months to 30 September
2022 - - - - - 21 21 - 21
============================= ===== ======= ===== ====== ======= ======= ===== =======
Total comprehensive
income for the period - - - - - 11,682 11,682 (22) 11,660
Dividends paid - - - - - (6,111) (6,111) - (6,111)
Issue of shares on
exercise of share
options 12 487 - - - - 499 - 499
Equity settled share-based
payments - - - 670 - - 670 - 670
Deferred tax on share-based
payment transactions - - -(162) - - (162) - (162)
============================= ===== ======= ===== ====== ======= ======= ===== =======
Total contributions
by and distributions
to owners 12 487 - 508 - (6,111) (5,104) - (5,104)
============================= ===== ======= ===== ====== ======= ======= ===== =======
At 30 September 2022 2,997 102,633 22,438 11,146 41,936 161,152 (112) 161,040
============================= ===== ======= ===== ====== ======= ======= ===== =======
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2022 (unaudited)
6 months
ended Year ended
6 months 30 Sept 31 March
ended 2021 2022
30 Sept
2022 (Restated) (Audited)
GBP'000 GBP'000 GBP'000
=========================================== =================== =================== ============= ================
Operating activities
Profit for the period 11,639 5,125 12,303
Adjustments for:
Depreciation of property, plant and equipment 940 472 1,143
Depreciation of right of use assets 1,338 885 2,136
Amortisation of intangible assets 3,844 2,635 6,396
Gain on disposal of property, plant &
equipment (31) (6) (75)
and right of use assets
Foreign exchange losses/ (gains) 138 (13) (27)
Share-based payments expense 571 880 1,597
Other operating income - - (27)
Share of post-tax profit in equity accounted
associates (91) (20) (55)
Share of post-tax loss in equity accounted
joint ventures 384 - 149
Impairment of goodwill - - 16
Fair value changes in contingent consideration (886) 110 1,916
Movements in provisions (315) (22) 12
Finance income (52) (27) (54)
Finance expense 2,253 503 2,249
Acquisition expenses 171 999 1,236
Income tax expense 3,640 3,798 6,103
Pension charge in excess of contributions
paid 155 47 140
Operating cash flows before movements
in working capital 23,698 15,366 35,158
Changes in working capital:
Increase in inventories (4,284) (5,540) (6,700)
Decrease/ (Increase) in trade and other
receivables 8,949 (11,263) (22,194)
(Decrease)/ Increase in trade and other
payables (22,071) 8,397 21,234
================================================================ =================== ============= ================
Cash generated from operations 6,292 6,960 27,498
Payment of exceptional acquisition expenses (171) (999) (1,139)
Interest received 8 15 18
Interest paid - (161) -
Income taxes paid (5,047) (2,541) (7,256)
================================================================ =================== ============= ================
Net cash generated from operating activities 1,082 3,274 19,121
================================================================ =================== ============= ================
Investing activities
Purchase of property, plant and equipment (5,582) (3,589) (6,317)
Proceeds from sale of property, plant and
equipment 86 35 187
Purchase of intangible assets (264) (488)
Acquisition of subsidiaries (15,403) (39,467) (50,292)
Net cash acquired with subsidiary undertakings 4,722 2,679 3,422
Acquisition of interests in joint ventures (2,608) - (428)
Proceeds from repayment of directors' loans - - 978
Dividends received from associates 30 - 15
Net cash used in investing activities (19,019) (40,342) (52,923)
===================================================================== ======== ======== ========
Financing activities
Equity dividends paid (6,111) (3,236) (6,102)
Proceeds from issue of ordinary shares net of
share issue costs 499 52,714 52,728
Payment of financing costs - - (97)
Proceeds from bank borrowings 53,000 41,100 52,100
Repayment of bank borrowings (43,500) (41,400) (43,400)
Payment of lease liabilities (1,357) (1,094) (2,103)
Payment of deferred and contingent consideration (2,038) (847) (1,358)
Interest paid (882) - (1,139)
Payment of transaction costs relating to loans
and borrowings - (375) (375)
Net cash generated from/ (used in) financing
activities (389) 46,862 50,254
============================================================= ====== ======== ======== ========
Net increase/ (decrease) in cash and cash equivalents (18,326) 9,794 16,452
Cash and cash equivalents at beginning of period 25,028 8,592 8,592
Effect of changes in foreign exchange rates (4) 3 (16)
Cash and cash equivalents at end of period 6,698 18,389 25,028
============================================================= ====== ======== ======== ========
Notes to the Condensed Consolidated Interim Financial
Statements
For the six months ended 30 September 2022 (unaudited)
1. General Information
Brickability Group PLC (the 'Company' or the 'Group') is a
public company limited by shares, incorporated in the United
Kingdom under the Companies Act 2006 (registration number 11123804)
and registered in England and Wales. The registered office address
is c/o Brickability Limited, South Road, Bridgend Industrial
Estate, Bridgend, United Kingdom, CF31 3XG.
Copies of this Interim Report may be obtained from the
registered address or from the Investors section of the Company's
website at www.brickabilitygroupplc.com.
2. Basis of Preparation
These condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting
and should be read in conjunction with the Group's last annual
consolidated financial statements as at and for the year ended 31
March 2022. They do not include all of the information required for
a complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to understanding changes in the Group's
financial position and performance since the last annual financial
statements.
The Annual Report and Accounts for the year ended 31 March 2022
was audited and has been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Accounts for
the year ended 31 March 2022 was not qualified and did not contain
statements under s498(2) or (3) of the Companies Act 2006.
The financial information for the six months ended 30 September
2022 and 30 September 2021 is unaudited and has not been reviewed
by the Company's auditors.
The interim financial statements are presented in pounds
sterling, which is the functional currency of the Group. Amounts
are rounded to the nearest thousand, unless otherwise stated.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and thus continue to adopt the going concern
basis in preparing these interim financial statements.
3. Significant Accounting Policies
The Group has applied the same accounting policies in these
interim financial statements as in its 2022 annual financial
statements. There have been no significant amendments or new
standards introduced during the period that would have a material
impact on the amounts reported.
4. Use of judgements and estimates
The significant judgements made by management in applying the
Group's accounting policies and key sources of estimation
uncertainty for the interim financial statements are the same as
those described in the 2022 annual financial statements.
5. Segmental analysis
During the period, the Group changed its reportable segments due
to increasing diversification following recent acquisitions. It now
has four reportable divisions as follows:
-- Bricks and Building Materials, which incorporates the sale of
superior quality building materials to all sectors of the
construction industry including national house builders,
developers, contractors, general builders and retail to members of
the public;
-- Importing, which is primarily responsible for importing
building products, not otherwise available in the UK, to complement
traditional and contemporary architecture;
-- Distribution, which focuses on the sale and distribution of a
wide range of products, including windows, doors, radiators and
associated parts and accessories; and
-- Contracting, which provides flooring and roofing construction
services, primarily within the residential construction sector.
This is the first time results have been presented in these
divisions and thus the results reported for previous periods have
also been re-presented for comparison purposes. Revenues and
profits are reported in the same manner as that reported internally
to the Board, as the Group's Chief Operating Decision-Maker
(CODM).
6 months ended 30 September 2022
==============================================================================================
Bricks Central
and Building and group
Materials Importing Distribution Contracting eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== =============== ============ =============== ============== =============== ===============
Revenue from sale
of goods 270,101 42,865 27,259 - (17,465) 322,760
Revenue from
rendering
of services - 11,260 3,782 19,880 (5,013) 29,909
==================== =============== ============ =============== ============== =============== ===============
Total revenue 270,101 54,125 31,041 19,880 (22,478) 352,669
==================== =============== ============ =============== ============== =============== ===============
Adjusted EBITDA 15,704 5,424 4,953 2,565 (3,112) 25,534
==================== =============== ============ =============== ============== =============== ===============
Depreciation and
amortisation (6,122)
Acquisition costs (171)
Earn out
consideration
classified as
remuneration
under IFRS 3 (2,167)
Share-based payment
expense (571)
Finance income 52
Finance expense (2,253)
Share of results of
associates 91
Fair value gains
and losses 886
Group profit before
tax 15,279
==================== =============== ============ =============== ============== =============== ===============
6 months ended 30 September 2021 (Re-presented)
==============================================================================================
Bricks Central
and Building and group
Materials Importing Distribution Contracting eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== =============== ============ =============== ============== =============== ===============
Revenue from sale
of goods 171,713 25,525 20,666 - (9,463) 208,441
Revenue from
rendering
of services - 6,609 - 10,505 (2,052) 15,062
==================== =============== ============ =============== ============== =============== ===============
Total revenue 171,713 32,134 20,666 10,505 (11,515) 223,503
==================== =============== ============ =============== ============== =============== ===============
Adjusted EBITDA 11,261 3,151 3,918 949 (1,752) 17,527
==================== =============== ============ =============== ============== =============== ===============
Depreciation and
amortisation (3,992)
Acquisition costs (999)
Earn out
consideration
classified as
remuneration
under IFRS 3 (2,167)
Share-based payment
expense (880)
Finance income 27
Finance expense (503)
Share of results of
associates 20
Fair value gains
and losses (110)
Group profit before
tax 8,923
==================== =============== ============ =============== ============== =============== ===============
Year ended 31 March 2022 (Re-presented)
==============================================================================================
Bricks Central
and Building and group
Materials Importing Distribution Contracting eliminations Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== =============== ============ =============== ============== =============== ===============
Revenue from sale
of goods 404,582 56,826 44,206 - (22,945) 482,669
Revenue from
rendering
of services - 15,454 2,820 24,788 (5,562) 37,500
==================== =============== ============ =============== ============== =============== ===============
Total revenue 404,582 72,280 47,026 24,788 (28,507) 520,169
==================== =============== ============ =============== ============== =============== ===============
Adjusted EBITDA 24,317 8,273 7,849 2,680 (3,651) 39,468
==================== =============== ============ =============== ============== =============== ===============
Depreciation and
amortisation (9,691)
Acquisition and
re-financing
costs (1,236)
Earn out
consideration
classified as
remuneration
under IFRS 3 (4,333)
Share-based payment
expense (1,597)
Finance income 54
Finance expense (2,249)
Share of results of
associates 55
Share of results of
joint
ventures (149)
Fair value gains
and losses (1,916)
Group profit before
tax 18,406
==================== =============== ============ =============== ============== =============== ===============
6 months ended 30 September 2022
=========================================================================================
Bricks
and Building
Materials Importing Distribution Contracting Central Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== ============ =============== ============== ========== ===============
Non-current segment
assets 80,812 28,263 52,809 30,264 3,943 196,091
Current segment assets 111,735 30,849 23,043 10,281 - 175,907
========================= =============== ============ =============== ============== ========== ===============
Total segment assets 192,547 59,112 75,852 40,545 3,943 371,998
========================= =============== ============ =============== ============== ========== ===============
Investment in associates 321
Investment in joint
ventures 2,600
Investments in financial
assets 178
Group assets 375,097
========================= =============== ============ =============== ============== ========== ===============
Total segment
liabilities (99,418) (26,196) (10,994) (5,307) (21,600) (163,515)
Loans and borrowings
(excluding leases) (33,820)
Deferred tax liabilities (16,722)
========================= =============== ============ =============== ============== ========== ===============
Group liabilities (214,057)
========================= =============== ============ =============== ============== ========== ===============
6 months ended 30 September 2021 (Re-presented)
=========================================================================================
Bricks
and Building
Materials Importing Distribution Contracting Central Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== ============ =============== ============== ========== ===============
Non-current segment
assets 83,923 14,296 38,040 23,729 - 159,988
Current segment assets 124,875 14,526 17,643 6,818 955 164,817
========================= =============== ============ =============== ============== ========== ===============
Total segment assets 208,798 28,822 55,683 30,547 955 324,805
========================= =============== ============ =============== ============== ========== ===============
Investment in associates 241
Investments in financial
assets 125
Deferred tax assets 98
Group assets 325,269
========================= =============== ============ =============== ============== ========== ===============
Total segment
liabilities (93,743) (11,960) (10,951) (3,780) (23,253) (143,687)
Loans and borrowings
(excluding leases) (15,160)
Deferred tax liabilities (17,429)
========================= =============== ============ =============== ============== ========== ===============
Group liabilities (176,276)
========================= =============== ============ =============== ============== ========== ===============
Year ended 31 March 2022 (Re-presented)
=========================================================================================
Bricks
and Building
Materials Importing Distribution Contracting Central Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= =============== ============ =============== ============== ========== ===============
Non-current segment
assets 82,280 16,123 52,901 30,490 531 182,325
Current segment assets 131,498 17,258 25,258 10,143 1,075 185,232
========================= =============== ============ =============== ============== ========== ===============
Total segment assets 213,778 33,381 78,159 40,633 1,606 367,557
========================= =============== ============ =============== ============== ========== ===============
Investment in associates 261
Investment in joint
ventures 279
Investments in financial
assets 178
Deferred tax assets -
Group assets 368,275
========================= =============== ============ =============== ============== ========== ===============
Total segment
liabilities (99,360) (15,433) (4,357) (4,720) (48,254) (172,124)
Loans and borrowings
(excluding leases) (24,240)
Deferred tax liabilities (17,427)
========================= =============== ============ =============== ============== ========== ===============
Group liabilities (213,791)
========================= =============== ============ =============== ============== ========== ===============
6. Dividends
Year ended
6 months 6 months 31 March
ended ended 2022
30 Sept 30 Sept
2022 2021 (Audited)
GBP'000 GBP'000 GBP'000
============================================= =================== === =========== ========== ===============
Amounts recognised as distributions to
equity holders in the period:
Final dividend for the year ended 31 March
2022 of 1.0850p per share
(30 Sept 2021: for the year ended 31 March
2021 of 1.0850p per share)
(31 March 2022: for the year ended 31 March
2021 of 1.0850p per share) 6,111 3,236 3,236
Interim dividend for the year ended 31 March
2023
(31 March 2022: for the year ended 31 March
2022 of 0.96p per share) - - 2,866
======================================================================= =========== ========== ===============
Total dividends paid during the period 6,111 3,236 6,102
======================================================================= =========== ========== ===============
The Directors recommend that an interim dividend of 1.01p per
ordinary share be paid for the year ended 31 March 2023. This
dividend has not been included as a liability in these interim
financial statements.
7. Earnings per share
Earnings per share (EPS) is calculated by dividing the profit
for the year, attributable to ordinary equity holders of the
parent, by the weighted average number of ordinary shares
outstanding during the year.
Diluted EPS is calculated by dividing the profit for the year,
attributable to ordinary equity holders, by the weighted average
number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into
ordinary shares.
The calculation of basic and diluted earnings per share is based
on the following data:
6 months ended 30 September
2021
6 months ended 30 September
2022 (Restated)
================================== ====================================
Weighted Weighted
average Earnings average
number per number Earnings
Earnings of share Earnings of per share
GBP'000 shares (p) GBP'000 shares (p)
========================== ========= ============ ========= ========= ============ ===========
Basic earnings per share 11,661 298,826,434 3.90 5,160 264,356,685 1.95
Effect of dilutive
securities
Employee share options - 5,411,479 - - 5,017,128 -
Diluted earnings per
share 11,661 304,237,913 3.83 5,160 269,373,813 1.92
========================== ========= ============ ========= ========= ============ ===========
Year ended 31 March
2022 (Audited)
==================================
Weighted
average Earnings
number per
Earnings of share
GBP'000 shares (p)
========================== ========= ============ =========
Basic earnings per share 12,387 281,474,903 4.40
Effect of dilutive
securities - 5,512,650 -
Employee share options
Diluted earnings per
share 12,387 286,987,553 4.32
========================== ========= ============ =========
Adjusted earnings per share and adjusted diluted earnings per
share, based on the adjusted profit attributable to the equity
holders of the parent (adjusted profit for the period add
non-controlling interest share of loss), is based on the following
data:
6 months ended 30 September
2021
6 months ended 30 September
2022 (Restated)
================================== ====================================
Weighted Weighted
average Earnings average
number per number Earnings
Earnings of share Earnings of per share
GBP'000 shares (p) GBP'000 shares (p)
=============================== ========= ============ ========= ========= ============ ===========
Adjusted basic earnings
per share 17,925 298,826,434 6.00 12,917 264,356,685 4.89
Effect of dilutive securities
Employee share options - 5,411,479 - - 5,017,128 -
Adjusted diluted earnings
per share 17,925 304,237,913 5.89 12,917 269,373,813 4.80
=============================== ========= ============ ========= ========= ============ ===========
Year ended 31 March
2022 (Audited)
==================================
Weighted
average Earnings
number per
Earnings of share
GBP'000 shares (p)
=============================== ========= ============ =========
Adjusted basic earnings
per share 28,310 281,474,903 10.06
Effect of dilutive securities
Employee share options - 5,512,650 -
Adjusted diluted earnings
per share 28,310 286,987,553 9.86
=============================== ========= ============ =========
8. Business combinations
The Group acquired the entire share capital and 100% of the
voting rights in the following companies during the period:
Acquisition
Company acquired date
============================= ==============
Modular Clay Products Limited 31 May 2022
E. T. Clay Products Limited 30 September
2022
Heritage Clay Tiles Limited 30 September
2022
============================= ==============
The book value of the assets acquired and liabilities assumed on
acquisition are as follows:
Heritage
Modular E. T. Clay
Clay Products Clay Products Tiles
Limited Limited Limited
GBP'000 GBP'000 GBP'000
================================ =============== =============== =========
Property plant and equipment 16 157 29
Right of use assets 28 - -
Inventory 164 2,838 1,172
Trade and other receivables 2,569 8,651 1,072
Cash and cash equivalents 4,205 627 (109)
Trade and other payables (1,785) (5,524) (2,214)
Current income tax liabilities (514) (878) (37)
Lease liabilities (28) - -
Deferred tax 8 (31) 60
================================= =============== =============== =========
Total identifiable net assets/
( liabilities ) 4,663 5,840 (27)
================================= =============== =============== =========
Goodwill 5,010 5,868 1,012
================================= =============== =============== =========
Total consideration 9,673 11,708 985
================================= =============== =============== =========
Satisfied by:
Cash paid 7,283 7,490 630
Deferred cash consideration - 1,008 85
Contingent consideration 2,390 3,210 270
=============================== ====== ======= ====
Total consideration 9,673 11,708 985
=============================== ====== ======= ====
Due to the timing of the acquisitions, a detailed assessment of
the fair value of all identifiable net assets, and the value of any
uncollectable contractual cash flows, has not yet been completed at
the date of these interim financial statements. The goodwill figure
is therefore expected to change. Residual goodwill will primarily
comprise the value of the assembled workforce and expected
synergies arising from the acquisition. None of the goodwill is
expected to be deductible for tax purposes.
The above consideration is subject to post completion
adjustments and the deferred and contingent consideration is
undiscounted.
The acquisitions were carried out in order to expand the Group's
presence in the specification market and further broaden the
Group's access to manufacturers outside of the UK.
Included in the consolidated financial statements are the
following amounts of revenue and profit in respect of the
subsidiaries acquired:
Heritage
Modular E. T. Clay
Clay Products Clay Products Tiles
Limited Limited Limited
GBP'000 GBP'000 GBP'000
=========== =============== =============== =========
Revenue 5,088 - -
=========== =============== =============== =========
Net profit 829 - -
=========== =============== =============== =========
Had the current year business combinations taken place at the
beginning of the financial period, the Group's revenue for the
period would have been GBP379,958,000 and Group profit would have
been GBP14,379,000.
Acquisition related costs in connection with the above
companies, included in administrative expenses, amounted to
GBP171,000 as shown below. Due to the timing of the acquisitions,
not all costs have been invoiced or finalised at the time of
approving these interim financial statements.
Heritage
Modular E. T. Clay
Clay Products Clay Products Tiles
Limited Limited Limited
GBP'000 GBP'000 GBP'000
=================== =============== =============== =========
Acquisition costs 100 60 11
===================== =============== =============== =========
Contingent consideration
The Group has entered into contingent consideration arrangements
during the purchase of several subsidiaries. Final amounts payable
under these agreements are all subject to future performance and
the acquired business achieving pre-determined EBITDA targets, over
the three years following acquisition, with the exception of HBS NE
Limited which is over five years.
The fair value of all contingent consideration is based on a
discounting cash flow model, applying a discount rate of between
1.7% and 23.6% to the expected future cash flows.
Summarised below are the fair values of the contingent
consideration at both acquisition and reporting date, the potential
undiscounted amount payable and the discount rates applied within
the discounting cash flow models, for each acquisition where
contingent consideration arrangements remain in place.
Undiscounted Undiscounted
amount amount
Discount Fair value Fair value Fair value payable payable
rate at at 30 September at 30 September 30 September 30 September
Company acquisition 2022 2021 2022 2021
acquired GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
=============== =============== ================== =============== =============== ============== ==============
U Plastics
Limited 3.5% 2,208 1,100 2,306 1,116 2,400
Bathroom Barn
Limited 1.7% 231 98 227 100 233
McCann
Logistics Ltd 1.7% 889 1,584 890 1,604 913
Taylor Maxwell
Group
(2017) Limited 4.1% - 431 - 435 -
SBS Cladding
Limited 4.1% 1,845 1,434 - 1,500 -
Leadcraft
Limited 10.4% 722 700 - 861 -
16.1%
HBS NE Limited - 10,069 11,287 - 21,513 -
23.6%
Beacon Roofing 4.1% -
Limited 10.4% 1,172 1,933 - 2,355 -
As noted above, the amounts included in respect of Modular Clay
Products Limited, E. T. Clay Products Limited and Heritage Clay
Tiles Limited are undiscounted, pending completion of a detailed
fair value assessment.
The amounts for Beacon Roofing Limited, which was acquired on 31
March 2022, are also subject to completion of a detailed fair value
assessment which is in progress at the time of preparing these
interim financial statements.
The total potential undiscounted amount payable in respect of U
Plastics ranges from GBP246,000 to GBP2,400,000 (2021: GBP246,000
to GBP2,400,000). The amount payable for SBS Cladding Limited
ranges from GBP500,000 to GBP2,000,000. It is not possible to
determine a range of outcomes for the other companies acquired as
the arrangements do not contain a maximum payable.
The acquisition of Taylor Maxwell Group (2017) Limited is also
subject to further payments depending on future performance,
ranging from GBPnil to GBP13,000,000, over the three years
following acquisition. Based on current interpretation guidance
concerning contingent payments to employees under IFRS 3, the
earn-out amounts payable are recognised in profit or loss over the
earn-out period as remuneration costs. This is due to the inclusion
of a 'bad leaver' clause in the share purchase agreement, under
which the earn-out consideration payment is forfeited. The earn-out
consideration is therefore deemed to effectively be contingent on
the continued employment of the seller and the seller not being
considered a 'bad leaver'. The anticipated total amount payable,
however, is not expected to change due to other clauses and payment
terms within the share purchase agreement. A charge of GBP2,167,000
has been recognised in the period ended 30 September 2022 in
respect of this earn-out consideration, presented within other
administrative expenses.
A sensitivity in respect of the inputs into the discounted cash
flow model, determining the contingent consideration, is outlined
in note 9.
Business combinations completed in prior periods
Taylor Maxwell Group (2017) Limited
The Group acquired 100% of the share capital and voting rights
in Taylor Maxwell Group (2017) Limited on 30 June 2021. As
disclosed in the 2021 interim financial statements, the value of
the identifiable net assets of Taylor Maxwell had been included at
30 September 2021 on a provisional basis as an independent
valuation of the fair value of was ongoing at the time of preparing
the interim financial statements. The values were, however,
finalised before reporting the Group's annual results to 31 March
2022.
Details of the revised fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Book value Restated
originally fair
reported Adjustment value
GBP'000 GBP'000 GBP'000
================================ ============ =========== =========
Property plant and equipment 3,519 - 3,519
Right of use assets 2,971 6 2,977
Identifiable intangible assets 42,099 42,099
Inventory 9,126 - 9,126
Trade and other receivables 63,939 1 63,940
Employee benefits 2,689 166 2,855
Cash and cash equivalents 2,585 1 2,586
Trade and other payables (72,726) (1,441) (74,167)
Current income tax liabilities (380) 261 (119)
Lease liabilities (3,115) (7) (3,122)
Provisions - (469) (469)
Deferred tax (439) (10,968) (11,407)
================================= ============ =========== =========
Total identifiable net assets 8,169 29,649 37,818
================================= ============ =========== =========
Goodwill 54,086 (42,649) 11,437
================================= ============ =========== =========
Total consideration 62,255 (13,000) 49,255
================================= ============ =========== =========
Satisfied by:
Cash paid 36,167 1,947 38,114
Share consideration 10,000 - 10,000
Deferred cash consideration 3,088 (1,947) 1,141
Contingent consideration 13,000 (13,000) -
=============================== ======= ========= =======
Total consideration 62,255 (13,000) 49,255
=============================== ======= ========= =======
Had the full fair value assessment been carried out prior to
announcing the interim results to September 2021, these interim
financial statements would have differed as follows:
- GBP2,167,000 would have been recognised in administrative
expenses in respect of earn-out consideration payable to the
sellers of Taylor Maxwell. As outlined earlier in note 8, earn-out
consideration is payable depending on the future performance of the
business. Due to a clause in the contract, this earn-out
consideration is deemed to be treated as remuneration under IFRS 3,
with the cost being accrued in the profit and loss over the
earn-out period. This would have also led to a reduction in
goodwill and deferred consideration.
- Amortisation amounting to GBP702,000 would have been charged
on the intangible assets recognised. A deferred tax credit of
GBP133,000 would have also been recognised on the release of the
associated deferred tax liability over the intangible assets'
useful life.
- A decrease of GBP2,022,000 would have been recognised in the
defined benefit pension asset, had the scheme been re-valued at 30
September 2021. This would have resulted in a loss of GBP1,987,000
being recorded in OCI, in respect of the re-measurement of the
pension scheme, an increase in administrative expenses of GBP47,000
and an increase in interest income of GBP12,000. In addition,
deferred tax would have decreased by GBP378,000 with a
corresponding credit within OCI.
Rangeley Holdings Limited and Leadcraft Limited
The Group acquired 100% of the share capital and voting rights
in Rangeley Holdings Limited and Leadcraft Limited on 31 July 2021.
As disclosed in the 2021 interim financial statements, the value of
the identifiable net assets of had also been included at 30
September 2021 on a provisional basis as an independent valuation
of the fair value of was ongoing at the time of preparing the
interim financial statements. The values were, however, finalised
before reporting the Group's annual results to 31 March 2022.
Details of the revised fair value of identifiable assets and
liabilities acquired, purchase consideration and goodwill are as
follows:
Book value Restated
originally fair
reported Adjustment value
GBP'000 GBP'000 GBP'000
================================ ============ =========== =========
Property plant and equipment 128 - 128
Right of use assets 103 30 133
Identifiable intangible assets - 1,782 1,782
Inventory 13 - 13
Trade and other receivables 778 - 778
Cash and cash equivalents 94 - 94
Trade and other payables (247) - (247)
Current income tax liabilities (138) - (138)
Lease liabilities (103) (30) (133)
Deferred tax (18) (424) (442)
================================= ============ =========== =========
Total identifiable net assets 610 1,358 1,968
================================= ============ =========== =========
Goodwill 4,890 (1,361) 3,529
================================= ============ =========== =========
Total consideration 5,500 (3) 5,497
================================= ============ =========== =========
Satisfied by:
Cash paid 3,300 232 3,532
Deferred cash consideration 1,320 (77) 1,243
Contingent consideration 880 (158) 722
=============================== ====== ====== ======
Total consideration 5,500 (3) 5,497
=============================== ====== ====== ======
Had the full fair value assessment been carried out prior to
announcing the interim results to September 2021, these interim
financial statements would have differed as follows:
- Amortisation amounting to GBP36,000 would have been charged on
the intangible assets recognised. A deferred tax credit of GBP7,000
would have also been recognised on the release of the associated
deferred tax liability over the intangible assets' useful life.
The September 2021 comparatives have been restated in these
interim financial statements to reflect the above changes for both
acquisitions.
A prior period restatement would usually require the
presentation of a third balance sheet at 1 April 2021. However, as
the restatement of the provisional fair values would have no impact
on the balance sheet at that date, it is not considered that this
would provide additional useful information. As such, a third
consolidated balance sheet has not been included within these
interim financial statements.
9. Financial instruments
Fair values
The significant unobservable inputs used in the fair value
measurements categorised within level 3 of the fair value
hierarchy, together with a quantitative sensitivity analysis at 30
September and 31 March are shown below:
Significant
Financial Valuation Unobservable Range/ Sensitivity of the
instrument technique inputs estimate input to fair value
============== =========== ============================ ============== ====================================
Contingent Present Assumed probability-adjusted Sept 2022: The higher the adjusted
Consideration value of EBITDA of acquired GBP435,000 - EBITDA, the higher
in a business future entities. GBP53,781,000 the
combination cash flows fair value. If forecast
(note 8) Sept 2021: EBITDA was 10% higher,
GBP1,110,000 while all other variables
- remained constant,
GBP3,766,000 the
fair value of the
March 2022: overall contingent
GBP485,000 consideration liability
- would increase by
GBP55,468,000 GBP1,486,000 (2021:
GBP327,000). A 10%
decrease in EBITDA
would result in a
decrease in the liability
of GBP2,138,000 (2021:
GBP335,000).
Discount rate (March 2022: increase
of GBP1,982,000 and
Sept 2022: decrease of GBP2,282,000)
1.7% - 23.6%
The higher the discount
Sept 2021: rate, the lower the
1.7% - 4.9% fair value. If the
discount rate applied
March 2022: was 2% higher, while
1.7% - 23.6% all other variables
remained constant,
the fair value of
the overall contingent
consideration liability
would decrease by
GBP695,000 (2021:
GBP85,000). A 2% decrease
in the rate would
result in an increase
in the liability of
GBP629,000 (2021:
GBP82,000).
(March 2022: decrease
of GBP794,000 and
increase of GBP730,000)
============== =========== ============================ ============== ====================================
Reconciliation of level 3 fair value measurements of financial
instruments
6 months
ended Year ended
6 months 30 Sept 31 March
ended 2021 2022
30 Sept
2022 (Restated) (Audited)
Contingent consideration liability GBP'000 GBP'000 GBP'000
======================================== =================== === =========== ============= ===============
At 1 April 19,581 3,442 3,442
Additions through business combinations 5,870 880 13,808
Finance expense charged to profit or
loss 1,309 46 900
Settlement (1,435) (175) (485)
Fair value (gains)/ losses recognised
in profit or loss (886) 110 1,916
================================================================== =========== ============= ===============
At 30 September/ 31 March 24,439 4,303 19,581
================================================================== =========== ============= ===============
10. Loans and borrowings
Year ended
6 months 6 months 31 March
ended ended 2022
30 Sept 30 Sept
2022 2021 (Audited)
GBP'000 GBP'000 GBP'000
======================================== =========== ============= ===============
Current loans and borrowings at 1 April - - -
Non-current loans and borrowings at
1 April 24,240 15,750 15,750
=========== ============= ===============
Total loans and borrowings at 1 April 24,240 15,750 15,750
Issue of bank loans 53,000 41,100 52,100
Repayment of bank loans (43,500) (41,400) (43,400)
Payment of transactions costs - (375) (375)
Other movements* 80 85 165
Loans and borrowings at 30 September/
31 March 33,820 15,160 24,240
======================================== =========== ============= ===============
Analysed as:
Current loans and borrowings - - -
Non-current loans and borrowings 33,820 15,160 24,240
======================================== =========== ============= ===============
Loans and borrowings at 30 September/
31 March 33,820 15,160 24,240
======================================== =========== ============= ===============
*Other movements relate to interest accrued, arrangement fees
incurred and the amortisation of those fees.
The Directors consider that the carrying amount of loans and
borrowings approximates to their fair value.
11. Pensions
Defined benefit pension plans
On 30 June 2021, the Group acquired Taylor Maxwell Group (2017)
Limited, which operated a defined benefit pension scheme. The Group
therefore also acquired the Taylor Maxwell Group Limited Pension
and Assurance Scheme which is funded by the payment of
contributions to a separately administered trust fund. The defined
benefit pension scheme is closed to future accrual. Pension
benefits are related to the members' final salary at retirement (or
earlier date of leaving or death) and their length of service.
The Group commenced a buy-out process to transfer the risk
associated with the scheme to an insurer. As part of this process,
a buy-in contract was incepted on 7 July 2021 to meet the future
benefits payable and reduce the risk of additional funding being
required from the Group. The process is ongoing and is expected to
reach full buy-out stage within the next 12 months.
The value of the defined benefit scheme at each reporting date
is as follows:
Year ended
6 months 31 March
ended 2022
6 months 30 Sept (Audited)
2021
ended (Restated) GBP'000
30 Sept GBP'000
2022
GBP'000
================== =================== ============ ============== ==============
Assets 7,481 10,700 10,126
Liabilities (6,821) (9,867) (9,345)
Pension net asset 660 833 781
======================================= ============ ============== ==============
The discount and inflation rate assumptions used in the
valuations are as follows:
Year ended
6 months 31 March
ended 2022
6 months 30 Sept (Audited)
2021
ended (Restated) GBP'000
30 Sept GBP'000
2022
GBP'000
====================================== =================== ============ ============== ==============
Discount rate 5.6% 2.0% 2.6%
Inflation rate (CPI) 3.4% 3.1% 3.6%
Pension increases (Post 1988 GMP) 2.8% 2.6% 2.8%
Pension increases (Post 1997 pension) 3.4% 3.1% 3.6%
=========================================================== ============ ============== ==============
The valuations for September 2021 and September 2022 have been
prepared using the same methodology as that included in the Annual
Report and Accounts for the year ended 31 March 2022. Other
principal assumptions, in respect of mortality rates, are
consistent with those set out in that Annual Report and Accounts
for all periods.
The fair value of the scheme assets is analysed as follows:
Year ended
6 months 31 March
ended 2022
6 months 30 Sept (Audited)
2021
ended (Restated) GBP'000
30 Sept GBP'000
2022
GBP'000
================================= =================== ============ ============== ==============
Cash fund and net current assets 834 1,037 980
Insured annuities 6,647 9,663 9,146
Fair value of scheme assets 7,481 10,700 10,126
====================================================== ============ ============== ==============
12. Related party transactions
Transactions and balances between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
Key management personnel
Year ended
31 March
2022
6 months 6 months (Audited)
ended
ended 30 Sept GBP'000
2021
30 Sept GBP'000
2022
GBP'000
====================================== =================== ============ =========== ==============
Key management personnel compensation
Short-term employee benefits 1,808 1,252 6,355
Post-employment benefits 40 18 56
Share-based payment expense 200 168 417
Termination benefits - - 409
2,048 1,438 7,237
========================================================== ============ =========== ==============
During the interim period, the Group made sales amounting to
GBP21,000 (2021: GBP7,000 and year to 31 March 2022: GBP12,000) to
members of key management. A GBPnil balance was included within
trade receivables at each the reporting date, in respect of these
sales.
A balance of GBPnil (2021: GBPnil and year to 31 March 2022:
GBP24,000) is included in other payables in respect of a deposit
paid by a member of key management.
Other related parties
Included within trade receivables/ payables are the following
amounts due from/ to other related parties, at the reporting
date:
Amounts owed Amounts owed
by related parties to related parties
============= =========================== ============ =============================
Year Year ended
ended 31 March
2022
6 months 6 months 31 March 6 months 6 months (Audited)
ended ended 2022 ended ended
30 Sept 30 Sept (Audited) 30 Sept 30 Sept GBP'000
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ============= =========== ============== ============ ============= ================
Associates - - - 92 138 104
Other related parties - - - - - -
====================== ============= =========== ============== ============ ============= ================
- - - 92 138 104
==================================== =========== ============== ============ ============= ================
Transactions undertaken between the Group and its related
parties during the year were as follows:
Purchases from related
parties
Year ended
31 March
2022
6 months 6 months (Audited)
ended
ended 30 Sept GBP'000
2021
30 Sept GBP'000
2022
GBP'000
====================== =================== ============ =========== ==============
Associates 239 297 512
Other related parties 106 109 219
=========================================== ============ =========== ==============
345 406 731
========================================== ============ =========== ==============
Other related parties comprise of entities owned by directors
and key management. Purchases relate to rent and administrative
expenses.
13. Post balance sheet events
On 27 October 2022, the Group granted a total of 4,037,124
options under its Long Term Incentive Plan (LTIP) to employees,
including to directors and management ('Management Options'). The
Management Options were granted on the same terms as previous
awards and are subject to a performance period from 1 April 2022 to
31 March 2025. Grants to other employees are not subject to
performance criteria but do contain a service condition to remain
in employment during the three years to 31 March 2025.
On 24 November 2022, the Group purchased a property for
GBP2,336,0000.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR EAXFSALLAFFA
(END) Dow Jones Newswires
November 28, 2022 02:00 ET (07:00 GMT)
Brickability (LSE:BRCK)
Historical Stock Chart
From Apr 2024 to May 2024
Brickability (LSE:BRCK)
Historical Stock Chart
From May 2023 to May 2024