TIDMCARR
RNS Number : 0833G
Carr's Group PLC
23 November 2020
23 November 2020
CARR'S GROUP PLC
("Carr's" or the "Group")
FULL YEAR RESULTS
For the year ended 29 August 2020
A robust performance in a year of significant challenge
Carr's (CARR.L), the Agriculture and Engineering Group,
announces its full year results for the year ended 29 August
2020.
Financial highlights
Adjusted (1) FY 20 FY 19 +/-
-------------------------- ------ ------ -------
Revenue (GBPm) 395.6 403.9 -2.0%
Adjusted(1) operating
profit (GBPm) 16.2 18.9 -14.2%
Adjusted(1) profit
before tax (GBPm) 14.9 18.0 -17.4%
Adjusted(1) EPS (p) 11.9 14.6 -18.5%
Statutory FY 20 FY 19 +/-
Revenue (GBPm) 395.6 403.9 -2.0%
Operating profit (GBPm) 13.8 17.2 -19.5%
Profit before tax (GBPm) 12.5 16.3 -23.4%
Basic EPS (p) 10.3 13.1 -21.4%
Dividend (p per share) 4.75 4.75 -
Net debt (2) (GBPm) 18.9 20.9 -9.6%
Commercial and strategic highlights
-- Robust performance in challenging circumstances, slightly exceeding
revised Board expectations, demonstrating the benefit of the
Group's diversity
-- Difficult H1 in UK Agriculture largely mitigated by strong
H2, with increased deliveries and a collection model adopted
to maintain supplies to farmers throughout COVID-19 lockdown
-- International growth in Supplements and launch of new products
-- Engineering impacted by project delays, restricted access to
customer sites owing to COVID-19, and weakened oil price
-- Establishment of Global Robotics showrooms in Japan and USA
-- Strong cash and net debt position
Peter Page, Chairman, commented:
"In difficult market conditions the Group delivered a robust
financial performance, with full year profitability slightly ahead
of the Board's revised expectations. Across both divisions, the
Group responded well to managing the challenges arising from the
COVID-19 pandemic.
"The global economy has been dominated by COVID-19, creating
uncertainty and making forecasts difficult. Nevertheless, the Group
is well positioned as the agriculture sector remains crucial in
supplying raw materials and ingredients to the food chain, and our
engineering businesses are predominantly involved in government
funded contracts in the nuclear sector.
"Trading in the new financial year has started in line with the
Board's expectations. Whilst uncertainties remain in the broader
economic environment, the Board is confident about the prospects of
our business in the medium term."
(1) Adjusted results are consistent with how business
performance is measured internally and are presented to aid
comparability of performance. Adjusting items are disclosed in note
3
(2) Excluding leases. Further details of net debt can be found in note 8
Enquiries:
Carr's Group plc Tel: +44 (0) 1228 554 600
Tim Davies (Chief Executive)
Neil Austin (Chief Financial Officer)
Powerscourt Tel: +44 (0) 20 7250 1446
Nick Dibden / Lisa Kavanagh / Sam Austrums
About Carr's Group plc:
Carr's is an international leader in manufacturing value added
products and solutions, with market leading brands and robust
market positions in Agriculture and Engineering, supplying
customers in over 50 countries around the world.
Its Agriculture division manufactures and supplies feed blocks
and supplementation products for livestock, distributes animal
feeds and farm machinery, and runs a UK network of rural stores
which provide a one-stop shop for the farming community. Its
Engineering division designs and manufactures bespoke equipment and
provides technical engineering services into the nuclear, defence,
petrochemical, oil and gas, pharmaceutical, process and renewable
energy industries, including robotic and remote handling
equipment.
Chairman's Statement
Review of the year
For the year ended 29 August 2020, in difficult market
conditions the Group delivered a robust financial performance, with
full year profitability slightly ahead of the Board's revised
expectations. Across both divisions, the Group responded well to
managing the challenges arising from the COVID-19 pandemic.
First half trading in the Agriculture division was characterised
by both challenging market conditions affecting farm incomes and
continued unseasonal weather in the UK and USA. Trading in the
second half of the year recovered well, and overall profitability
exceeded the Board's revised expectations for the year. As COVID-19
restrictions were tightened, the UK Agriculture businesses proved
adept in maintaining supplies to farmers whilst keeping people
safe. In the Supplements business, new and innovative products were
launched, and expanded production and research capabilities
supported our international footprint, particularly in New Zealand
and Canada where feed block sales continued to build.
In the Engineering division, the first half of the year was
impacted by contract phasing. Whilst it had been expected some of
this would recover in the second half, delays in receiving expected
orders on overseas projects meant that this was not the case.
Restrictions imposed on travel and access to customer sites as a
consequence of COVID-19, together with the weakened oil price, also
negatively affected the division's full year performance with
profitability below the Board's revised expectations.
At the onset of COVID-19, all sites moved quickly to follow
government guidelines and implemented a range of safety measures
including social distancing, increased hygiene and shift-working.
People worked from home where possible, maintaining strong
engagement with our customers, suppliers and each other, using
virtual media. Contingencies were planned across both divisions,
which remain under constant review.
Financial review
Revenue for the year decreased by 2.0% to GBP395.6m (2019:
GBP403.9m). Adjusted operating profit was down 14.2% to GBP16.2m
(2019: GBP18.9m), with Agriculture contributing GBP13.4m (2019:
GBP14.7m) and Engineering GBP3.8m (2019: GBP5.9m). Reported
operating profit fell by 19.5% to GBP13.8m (2019: GBP17.2m).
Adjusted profits are before amortisation of acquired intangible
assets totalling GBP1.4m and restructuring and closure costs of
GBP2.0m offset by adjustments to contingent consideration totalling
GBP0.9m, giving a net total adjusting items of GBP2.4m.
Adjusted profit before tax was down 17.4% to GBP14.9m (2019:
GBP18.0m) and reported profit before tax decreased by 23.4% to
GBP12.5m (2019: GBP16.3m). Basic earnings per share were down by
21.4% to 10.3p (2019: 13.1p), with fully diluted earnings per share
of 10.2p (2019: 12.8p) and adjusted earnings per share down 18.5%
to 11.9p (2019: 14.6p).
Net debt at 29 August 2020, excluding leases, was GBP18.9m
(2019: GBP20.9m). This movement included GBP18.1m generated from
operations, GBP8.9m used in investing activities and GBP3.3m paid
in dividends.
The recent leasing standard IFRS 16 has been adopted in the
year, with a consequential reduction to opening net assets of
GBP1.4m as operating leases were brought onto the balance sheet.
There was also a consequential impact to the income statement of an
additional charge to profit before tax of GBP0.1m resulting from
the new standard.
With the onset of COVID-19, t he Group implemented a rigorous
cash forecasting process which is tested regularly against a
variety of scenarios. Cash management measures were also
implemented to limit non-essential expenditure. Whilst an interim
dividend decision in April 2020 was deferred, this was subsequently
confirmed and reinstated in July 2020 once the short-term impact of
COVID-19 on the business became clearer. Such measures preserved
the Group's strong cash and net debt positions, leaving good
headroom on the Group's committed banking facilities.
Dividend
The Board is proposing a final dividend of 2.5 pence per share
which, together with the interim dividend of 2.25 pence per share
declared in July 2020, makes a total dividend for the year of 4.75
pence per share (2019: 4.75p). The final dividend, if approved by
Shareholders, will be paid on 15 January 2021, to shareholders on
the register on close of business 4 December 2020, and the shares
will go ex-dividend on 3 December 2020.
Corporate governance and Board succession
This has been an important year for Board succession. After
joining the Board in November 2019, I took over as Non-Executive
Chairman following the AGM in January 2020. In October 2020 Kristen
Eshak Weldon joined the Board as an Independent Non-Executive
Director, bringing international experience of investment appraisal
along with real insight into new technology applications in the
agri-food sector.
In August 2020 we announced that Tim Davies would be stepping
down after seven years as CEO of the Group. On behalf of all
shareholders, I am extremely grateful to Tim for his dedication and
contribution to the business. Tim's leadership style and genuine
concern for colleagues have been most evident since March 2020 as
everyone has come to terms with different ways of working,
heightened levels of uncertainty and increased demands on the
business. Tim will leave the Board at the AGM in January 2021 but
will remain available to give advice and share his knowledge during
a handover period.
Hugh Pelham joins Carr's Group as CEO in January 2021, standing
for election at the AGM. Hugh has relevant experience in developing
and growing businesses and integrating them into larger group
structures, he has worked in many markets around the world, and he
has developed high performing management teams. I look forward to
welcoming Hugh to the Group.
As part of its long-term succession strategy, it is planned that
Alistair Wannop will stand down from the Board at the conclusion of
the AGM in January 2022. Alistair was first appointed to the Board
as a Non-Executive Director in September 2005. Given the level of
Board succession achieved during 2019 and 2020, and recognising
Alistair's deep knowledge of the Group's activities and
understanding of agricultural industries, the Board considers it
appropriate for Alistair to remain appointed for another year to
ensure continuity.
AGM January 2021
In the light of the COVID-19 pandemic, the AGM on 12 January
2021 will be held in a revised format. As shareholders will not be
able to attend the meeting in person, the Board will be inviting
shareholders to vote on the resolutions proposed by proxy, and to
submit any questions in advance of the meeting. We will be
publishing a broadcast on the Company's website, reflecting on the
year, providing an update on current trading, introducing Hugh
Pelham, and answering questions raised by shareholders, following
the AGM on 12 January 2021.
Our people
Carr's employs over 1,100 people across the globe, all of whom
have made a significant contribution to the business this year,
particularly in the demanding situation arising from COVID-19. I am
extremely grateful for everyone's support, endurance and
adaptability.
Outlook
The Group remains committed to building value by focusing on
markets with growth potential, diversifying its international
footprint and differentiation through innovation and
technology.
The global economy has been dominated by COVID-19, creating
uncertainty and making forecasts difficult. Nevertheless, the Group
is well positioned as the agriculture sector remains crucial in
supplying raw materials and ingredients to the food chain, and our
engineering businesses are predominantly involved in government
funded contracts in the nuclear sector. Management will continue to
focus on optimising all the businesses in the Group.
Trading in the new financial year has started in line with the
Board's expectations. Whilst uncertainties remain in the broader
economic environment, the Board is confident about the prospects of
our business in the medium term.
Peter Page
Chairman
23 November 2020
Chief Executive's Review
As outlined in our trading update on 12 March 2020, trading
conditions across both divisions during the first half of the year
were challenging and, unrelated to COVID-19, led to a reduction in
the Board's performance expectations for the full year.
I am pleased to report, however, that despite these challenges,
and the significant measures adopted across the Group in order to
manage the effects of the pandemic, a very robust performance in
the second half resulted in a full year performance which exceeded
those revised expectations.
While cash preservation has remained a key priority, we have
been able to continue to invest in key areas to ensure that the
Group remains well placed for the future. During the year, we
strengthened our presence in growth markets across the world,
whilst driving innovation and technological advances to maintain
our strong position in our established markets.
AGRICULTURE
As previously reported, trading in our Agriculture division in
the first half was slower than the prior year, largely driven by
atypical weather patterns and growing conditions from the previous
summer which reduced demand for key products. Improved trading
during the second half, however, resulted in a robust outturn for
the full year.
During the year, revenue was down 4.1% to GBP342.6m (2019:
GBP357.4m). Adjusted operating profit was down 8.5% to GBP13.4m
(2019: GBP14.7m), whilst reported operating profit was down 4.8% to
GBP13.4m (2019: GBP14.1m).
During the period, following the appointment of a new Managing
Director in the UK Agriculture business, the management team was
strengthened through a further four senior appointments to help
optimise efficiencies and drive strategic growth, whilst
maintaining an absolute focus on serving our customers. We also
appointed a new Commercial Director in our Supplements
business.
Supplements
Total global feed block sales volumes were up 1.2% year-on-year.
Sales volumes were slightly ahead of the Board's expectations as a
direct result of increased demand and growth in target markets
during the second half. Despite overall volume increases, however,
increases in raw material prices were not wholly mitigated through
selling price increases which led to lower margins, particularly in
the UK.
UK feed block volumes were up 5.2% compared to the prior year.
This performance was driven by improved livestock prices in the
second half, which increased farmers' willingness to invest in
supplementation.
Following a weaker first half, US feed block sales subsequently
recovered towards the end of the financial year, with volumes up
0.5% in the period overall. Whilst cattle prices were suppressed
during the majority of the period, prices recovered towards the
end.
During the year, we successfully launched our new FesCool(R)
feed block in the USA following extensive research trials
undertaken in conjunction with Kansas State University. FesCool(R)
enhances the performance of grazing cattle in warm climates by
reducing the impact of fescue toxicity and enhances our range of
innovative supplements that add real value to livestock
farmers.
In 2020, we also invested in and enhanced our production systems
in the USA, spending GBP2.1m in improving our manufacturing
facilities at two of our sites and in the creation of a research
facility. This investment will help drive efficiencies and provide
us with the opportunity to develop and test new product ranges,
ingredients, and manufacturing techniques.
We continue to make progress in developing sales of feed blocks
into Canada. As North America moved into stricter national travel
restrictions, we benefited from having a sales team on the ground
locally. The Canadian market represents a significant potential
market for sales into beef and equine sectors, and can be supplied
out of the Group's existing facility in Belle Fourche, South
Dakota.
New Zealand feed block sales were up 40% in the period where we
continued to make progress in raising customer awareness and
building relationships with further distribution partners. The
Group continues to consider the New Zealand market as offering
strong potential for future growth.
In Germany, our joint venture business, Crystalyx Products GmbH,
saw a 4.1% decrease in feed block sales compared to the prior year.
During the year, the business launched its new Pick Block product,
manufactured out of its plant in Oldenburg, Germany , and sales are
expected to build. Pick Block is designed to improve poultry
welfare standards through environmental enrichment, encouraging
birds to demonstrate a wider range of natural behaviours.
Animax, the Group's manufacturer of livestock bolus supplements,
had a challenging year owing to market pressures coupled with
milder weather which reduced customer demand. During the year, the
business appointed a new Commercial Director and increased focus on
international growth opportunities. The Group continues to make
progress on its manufacturing automation project, which is expected
to help drive future efficiencies, new product ranges and even
higher product quality.
UK Agriculture
Total volumes in our compound feed business declined by 6.9%
during the year. This was largely driven by the warm summer in 2019
and subsequent mild winter which led to high stocks of good forage
and reduced farmer demand for bought-in feeds during the first
half. Such reduction in demand gave rise to increased competition
which impacted margins during the period. During the second half,
the initial closure of the food service sector impacted farmer
incomes; however, the strong retail sales subsequently seen led to
a significant pick-up in demand for certain meat and dairy products
which largely offset the effect of this.
The Group's fuel distribution business saw sales volumes
increase 2.9% on the prior year. This was driven by colder weather
during March 2020 and customers stocking up on heating oil in the
early stages of the pandemic when commodity prices were low, as
well as increased demand from farmers due to a busy spring period
on farms generally.
Machinery sales were particularly strong in the year, up 19.2%
overall and achieving record sales of GBP45.5m. New machinery sales
were up 17% on the previous year. The performance was driven by
improved farmer confidence and government loan schemes supporting
farming investments, together with pent-up demand following a
period of subdued activity prior to the original Brexit date.
Growth in the machinery business, which outperformed the market
significantly, is also attributable to the development of our
relationship with a key supplier.
The Group's retail outlets performed resiliently, with
like-for-like sales up 1.6% and overall sales up 0.6% during the
period. During the pandemic, extensive measures were taken to
ensure that our network of country stores could continue to service
our core farming customers, who remain critical to the UK's food
supply chain. These innovative measures included the successful
roll-out of a pre-order, collection and delivery service across all
branches.
During the year we also progressed our rationalisation and
efficiency programme in UK Agriculture. Our ongoing review of
retail store effectiveness resulted in the closure of four sites as
we focus our offering at strategic locations and enhancing our
delivery and collection models. During the pandemic, the early
stages of lockdown gave us the ability to test new ways of working,
which has provided valuable strategic insight for the future and
helped develop our strategy for managing a second wave.
Agriculture Outlook
The Group continues to remain confident in the medium-term
prospects of the Agriculture division.
Whilst short-term uncertainty relating to Brexit continues, our
resilient performance in UK Agriculture during the pandemic
illustrates the strength of our business and its ability to
overcome future challenges. That adaptability, combined with
operational efficiencies and enhanced customer focus, places the
business well for future growth. Since the year-end, we have also
significantly expanded the geographic coverage of our machinery
franchise across southern Scotland with a more focused product
range, which provides an opportunity to grow sales over the medium
term.
Internationally, our Supplements business continues to enhance
its presence in territories with significant growth opportunity,
particularly across Europe, the USA, Canada, and New Zealand. We
also remain focused upon increasing our presence in new markets
including the UK dairy sector. We continue to build growth through
strategic partnerships and sustained research and development, and
remain confident in the division's medium term outlook.
ENGINEERING
The Engineering division performed resiliently despite
significant challenges. First half trading was slow due to contract
phasing and delays in receiving key robotics orders. This did not
improve in the second half, as had been expected, mainly due to
temporary disruption to nuclear and defence projects due to
COVID-19 restrictions, which affected travel and access to customer
sites. In addition, the sharp decline in the oil price led to
customers deferring investments in the oil and gas sector. Whilst
delays to projects had a negative impact on divisional performance,
the business was able to strengthen its customer relationships by
working flexibly to accommodate changing needs.
During the year, revenue was up 14.0% to GBP53.0m (2019:
GBP46.5m). NW Total, acquired towards the end of the prior year,
contributed GBP11.7m (2019: GBP1.9m). Adjusted operating profit was
down 35.6% to GBP3.8m (2019: GBP5.9m) and reported operating profit
was down 77.2% to GBP1.4m (2019: GBP6.0m).
UK Service and Manufacturing
Our UK Service and Manufacturing business delivered a solid
performance during the first half. The second half, however, was
heavily impacted by the decline in the oil price and significantly
reduced investment in the oil and gas sector, which led to delays
on one major project. In the year, total revenues were GBP29.4m
(2019: GBP23.0m), including NW Total revenues of GBP11.7m (2019:
GBP1.9m).
NW Total had a strong performance in its first full year as part
of the Group. Whilst COVID-19 restrictions were imposed temporarily
on one customer site, this had a limited impact on the business
overall and the risk of further impact or delay to that project is
reduced by on-site controls now in place. The order book for the
business remains very strong and we remain very encouraged by the
opportunities, particularly in the defence sector, that NW Total
brings to the division.
During the year the Group also invested GBP1.3m in
state-of-the-art machinery at its site in Carlisle, bringing
large-scale machining capabilities and enhancing the range of
customer services available within the division.
Global Robotics
The Group's Global Robotics business had a challenging year.
This was driven by a weaker order book, resulting from contract
phasing and delays to projects in Japan, together with export
restrictions which continue to affect China. These challenges were
exacerbated by delays and travel restrictions imposed as a result
of COVID-19. Revenues for the year totalled GBP14.8m (2019:
GBP16.5m).
While the business experienced lower levels of activity during
the year, the order book was strengthened significantly. We also
remain optimistic about opportunities in Japan, where many of the
country's nuclear facilities continue to be decommissioned. In the
year, we opened a showroom for our products in Japan which will
help develop opportunities in the region.
Our Global Robotics business continues to develop its position
in the USA. Good progress continues to be made on the significant
$8.5m contract previously announced, and during the year we opened
a robotics showroom at our facility in Mooresville, North Carolina,
which will help demonstrate the efficacy of our products to
customers in North America.
Global Technical Services
The Group's Global Technical Services business performed in line
with expectations, generating revenues of GBP8.8m (2019:
GBP7.0m).
The phasing of several long-term Mechanical Stress Improvement
Process (MSIP(R)) projects enhanced performance in the second half
of the year, which will continue throughout the current year.
During the period, the business was awarded another $6m MSIP(R)
contract to be delivered through to 2022.
The development of our passive cooling technology continues to
progress, following the award of funding from the US Department of
Energy in 2019. It is anticipated that an application for a second
tranche of funding will be made during 2021. This technology has
the potential to be retrofitted on existing nuclear power plants to
improve safety.
Engineering Outlook
The Group remains confident in the medium-term prospects of the
Engineering division.
Whilst parts of the division which serve oil and gas markets
have been impacted in the short-term, owing to a reduction in
customer investment attributable to the low oil price, there remain
significant opportunities across nuclear and defence markets. The
division also continues to develop technologies, in conjunction
with its strategic partners, to provide innovative solutions to
customer challenges in nuclear markets.
Our improved divisional structure provides a comprehensive
offering, able to compete on a larger scale than before. Such
changes provide an uplift in the volume of contracts we can tender
for and leave the division well placed for future growth.
Tim Davies
Chief Executive Officer
23 November 2020
CONSOLIDATED INCOME STATEMENT
for the year ended 29 August 2020
Note 2020 2019
GBP'000 GBP'000
Continuing operations
Revenue 2 395,630 403,905
Cost of sales (343,381) (349,798)
Gross profit 52,249 54,107
Distribution costs (19,507) (18,454)
Administrative expenses (21,535) (20,835)
Adjusted (1) share of post-tax results
of associate 1,191 1,230
Adjusting items 3 - (306)
Share of post-tax results of associate 1,191 924
Share of post-tax results of joint ventures 1,442 1,453
Adjusted (1) operating profit 16,247 18,930
Adjusting items 3 (2,407) (1,735)
Operating profit 2 13,840 17,195
Finance income 313 463
Finance costs (1,656) (1,349)
Adjusted (1) profit before taxation 14,904 18,044
Adjusting items 3 (2,407) (1,735)
Profit before taxation 2 12,497 16,309
Taxation 4 (1,575) (2,685)
Profit for the year 10,922 13,624
===================== =====================
Profit attributable to:
Equity shareholders 9,533 12,049
Non-controlling interests 1,389 1,575
---------------------
10,922 13,624
===================== =====================
Earnings per ordinary share (pence)
Basic 5 10.3 13.1
Diluted 10.2 12.8
Adjusted 5 11.9 14.6
(1) Adjusted results are consistent with how business
performance is measured internally and is presented to aid
comparability of performance. Adjusting items are disclosed in note
3. An alternative performance measures glossary can be found in
note 9.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 29 August 2020
2020 2019
GBP'000 GBP'000
Profit for the year 10,922 13,624
---------- ---------
Other comprehensive (expense)/income
Items that may be reclassified subsequently
to profit or loss:
* Foreign exchange translation (losses)/gains arising
on translation of overseas subsidiaries (2,552) 1,857
* Net investment hedges (54) 37
* Taxation credit/(charge) on net investment h edges 10 (7)
Items that will not be reclassified subsequently
to profit or loss:
- Actuarial gains/(losses) on retirement
benefit asset:
- Group 142 (1,845)
- Share of associate 408 (88)
* Taxation (charge)/credit on actuarial gains/(losses)
on retirement benefit asset: (27) 314
(96) 15
- Group
- Share of associate
Other comprehensive (expense)/income for
the year, net of tax (2,169) 283
---------- ---------
Total comprehensive income for the year 8,753 13,907
========== =========
Total comprehensive income attributable to:
Equity shareholders 7,364 12,332
Non-controlling interests 1,389 1,575
8,753 13,907
========== =========
CONSOLIDATED BALANCE SHEET
as at 29 August 2020
2020 2019
GBP'000 GBP'000
Assets
Non-current assets
Goodwill 32,041 32,877
Other intangible assets 9,171 9,318
Property, plant and equipment 38,259 41,917
Right-of-use assets 14,856 -
Investment property 158 164
Investment in associate 14,307 13,392
Interest in joint ventures 10,551 9,671
Other investments 73 76
Financial assets
- Non-current receivables 20 22
Retirement benefit asset 8,037 7,769
Deferred tax asset - 410
---------- ----------
127,473 115,616
---------- ----------
Current assets
Inventories 40,961 46,270
Contract assets 8,114 9,466
Trade and other receivables 51,686 56,349
Current tax assets 1,535 -
Financial assets
- Derivative financial instruments 3 -
- Cash and cash equivalents 17,571 28,649
---------- ----------
119,870 140,734
---------- ----------
Total assets 247,343 256,350
---------- ----------
Liabilities
Current liabilities
Financial liabilities
- Borrowings (11,420) (23,856)
- Leases (2,778) -
Contract liabilities (1,061) (1,269)
Trade and other payables (55,522) (62,653)
Current tax liabilities (33) (1,010)
---------- ----------
(70,814) (88,788)
---------- ----------
Non-current liabilities
Financial liabilities
- Borrowings (25,021) (28,586)
- Leases (11,171) -
Deferred tax liabilities (4,783) (4,987)
Other non-current liabilities (1,385) (2,999)
---------- ----------
(42,360) (36,572)
---------- ----------
Total liabilities (113,174) (125,360)
---------- ----------
Net assets 134,169 130,990
========== ==========
Shareholders' equity
Share capital 2,312 2,299
Share premium 9,176 9,165
Other reserves 105,638 102,786
--------
Total shareholders' equity 117,126 114,250
Non-controlling interests 17,043 16,740
-------- --------
Total equity 134,169 130,990
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 29 August 2020
Equity Foreign Total Non-
Share Share Treasury Compensation Exchange Other Retained Shareholders' controlling
Capital Premium Share Reserve Reserve Reserve Earnings Equity Interests Total
GBP'000 GBP'000 Reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------- --------- ---------- ------------- --------- --------- ---------- --------------------------- ------------ ---------
At 2 September
2018 2,285 9,141 - 1,427 4,259 202 87,843 105,157 15,685 120,842
--------- --------- ---------- ------------- --------- --------- ---------- --------------------------- ------------ ---------
Profit for
the
Year - - - - - - 12,049 12,049 1,575 13,624
Other
comprehensive
income/(expense) - - - - 1,887 - (1,604) 283 - 283
--------- --------- ---------- ------------- --------- --------- ---------- --------------------------- ------------ ---------
Total
comprehensive
income - - - - 1,887 - 10,445 12,332 1,575 13,907
Dividends
paid - - - - - - (4,173) (4,173) (588) (4,761)
Equity-settled
share-based
payment
transactions - - - 53 - - 759 812 68 880
Allotment
of shares 14 24 - - - - - 38 - 38
Purchase
of own shares
held in trust - - (13) - - - - (13) - (13)
Reclassified
from liabilities - - - 97 - - - 97 - 97
Transfer - - 13 - - (3) (10) - - -
At 31 August
2019 2,299 9,165 - 1,577 6,146 199 94,864 114,250 16,740 130,990
========= ========= ========== ============= ========= ========= ========== =========================== ============ =========
As previously
reported
at 31 August
2019 2,299 9,165 - 1,577 6,146 199 94,864 114,250 16,740 130,990
Effect of
IFRS 16 adoption - - - - - - (931) (931) (511) (1,442)
--------- --------- ---------- ------------- --------- --------- ---------- --------------------------- ------------ ---------
At 1 September
2019 (restated) 2,299 9,165 - 1,577 6,146 199 93,933 113,319 16,229 129,548
--------- --------- ---------- ------------- --------- --------- ---------- --------------------------- ------------ ---------
Profit for
the
Year - - - - - - 9,533 9,533 1,389 10,922
Other
comprehensive
(expense)/income - - - - (2,596) - 427 (2,169) - (2,169)
--------- --------- ---------- ------------- --------- --------- ---------- --------------------------- ------------ ---------
Total
comprehensive
(expense)/income - - - - (2,596) - 9,960 7,364 1,389 8,753
Dividends
paid - - - - - - (3,344) (3,344) (588) (3,932)
Equity-settled
share-based
payment
transactions - - - (843) - - 691 (152) 15 (137)
Excess deferred
taxation
on share-based
payments - - - - - - (27) (27) (2) (29)
Allotment
of shares 13 11 - - - - - 24 - 24
Purchase
of own shares
held in trust - - (58) - - - - (58) - (58)
Transfer - - 13 - - (2) (11) - - -
At 29 August
2020 2,312 9,176 (45) 734 3,550 197 101,202 117,126 17,043 134,169
========= ========= ========== ============= ========= ========= ========== =========================== ============ =========
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 29 August 2020
Note 2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from continuing operations 6 22,639 16,004
Interest received 176 178
Interest paid (1,696) (1,276)
Tax paid (3,059) (2,306)
Net cash generated from operating activities 18,060 12,600
--------- ---------
Cash flows from investing activities
Acquisition of subsidiaries (net of
overdraft/cash acquired) - (9,868)
Contingent/deferred consideration paid (2,659) (379)
Dividend received from associate and
joint ventures 701 711
Other loans 718 79
Purchase of intangible assets (1,459) (1,310)
Proceeds from sale of property, plant
and equipment 421 831
Purchase of property, plant and equipment (6,569) (4,471)
Purchase of own shares held in trust (58) (13)
---------
Net cash used in investing activities (8,905) (14,420)
--------- ---------
Cash flows from financing activities
Proceeds from issue of ordinary share
capital 24 38
New bank loans and movement on RCF 1,889 14,430
Lease principal repayments (3,171) (1,278)
Repayment of borrowings (2,459) (2,493)
Decrease in other borrowings (14,508) (1,352)
Dividends paid to shareholders (3,344) (4,173)
Dividends paid to related party (588) (588)
--------- ---------
Net cash (used in)/generated from financing
activities (22,157) 4,584
--------- ---------
Effect of exchange rate changes (989) 526
--------- ---------
Net (decrease)/increase in cash and
cash equivalents (13,991) 3,290
Cash and cash equivalents at beginning
of the year 24,295 21,005
--------- ---------
Cash and cash equivalents at end of
the year 10,304 24,295
========= =========
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Basis of preparation and going concern
The financial information in this preliminary announcement does
not constitute the Company's statutory accounts for the years ended
29 August 2020 or 31 August 2019. Statutory accounts for 2019 have
been delivered to the Registrar of Companies, and those for 2020
will be delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
Going concern
The financial information in this preliminary announcement has
been prepared on a going concern basis which the Directors consider
to be appropriate for the following reasons.
The Directors have reviewed the Group's operational forecasts
and projections for the three years to 2 September 2023 as used for
the viability assessment, taking account of reasonably possible
changes in trading performance, together with the planned capital
investment over that same period. The Group is expected to have a
sufficient level of financial resources available through operating
cash flows and existing bank facilities for a period of at least 12
months from approval of the financial statements ("The going
concern period"). The Group has operated within all its banking
covenants throughout the year. In addition, the Group's main
banking facility is in place until November 2023 and an invoice
discounting facility has been recently renewed for a three year
period to August 2023.
For the purpose of assessing the appropriateness of the
preparation of the Group's accounts on a going concern basis, the
Directors have prepared financial forecasts for the Group,
comprising profit before and after taxation, balance sheets and
cash flows through to year ended 2023. The forecasts consider the
current cash position, the availability of banking facilities and
an assessment of the principal areas of risk and uncertainty,
paying particular attention to the impact of Covid-19. These
forecasts have been sensitised for severe but plausible downside
scenarios. The scenarios tested included significant reductions in
profitability and associated cashflows, with a reduction in
consumer demand affecting all business units, additional impacts on
Agriculture business units from Brexit and a larger impact on
Engineering from disruption caused by Covid-19. The results of this
stress testing showed that, due to the stability of the core
business, the Group would be able to withstand the impact of these
severe but plausible downside scenarios occurring over the period
of the financial forecasts.
In addition, several other mitigating measures remain available
and within the control of the Directors that were not included in
the scenarios. These include withholding discretionary capital
expenditure and reducing or cancelling future dividend
payments.
In all the scenarios, the Group complied with its financial bank
covenants, operated within its existing bank facilities, and met
its liabilities as they fall due.
Consequently, the Directors are confident that the Group and the
Company will have sufficient funds to continue to meet their
liabilities as they fall due for at least 12 months from the date
of approval of the financial statements and therefore have prepared
the financial information in this preliminary announcement on a
going concern basis.
Accounting policies
The accounting policies are consistent with those of the prior
year except for the adoption of new standard IFRS 16.
IFRS 16 'Leases'
The Group adopted IFRS 16 with effect from 1 September 2019 and
has applied the standard using the modified retrospective approach
under which the cumulative effect of initially applying the
standard is recognised at the date of initial application. The
Group has restated its opening total equity position as at 1
September 2019 by a charge of GBP1.4m. Comparative information has
not been restated and is therefore still reported under IAS 17
'Leases' and related interpretations. To assist comparability, note
10 shows the balance sheet as at 29 August 2020 had the Group
continued to adopt IAS 17 and related interpretations.
Under the modified retrospective approach used, the Group has
recognised right-of-use assets at their carrying amounts as if the
standard had been applied since the commencement date, but
discounted using the Group's incremental borrowing rate at the date
of initial application. The liability has been recognised at an
amount equal to the present value of the remaining lease payments,
discounted using the Group's incremental borrowing rate at the date
of initial application. The incremental borrowing rates used range
between 1.3% - 3.88% based on the geographic location and economic
circumstances of the lessee. In addition to existing finance leased
assets with a net book value of GBP4.4m being transferred to
right-of-use assets on transition, GBP11.5m of right-of-use assets
were recognised on transition in respect of leases previously
accounted for as operating leases under IAS 17. An additional lease
obligation of GBP12.7m was recognised on transition in respect of
leases previously accounted for as operating leases. Prepayments
and accruals totalling GBP0.5m have been removed from the balance
sheet on transition.
A reconciliation of operating lease commitments disclosed as at
31 August 2019 to the lease liabilities recognised on transition is
as follows:
GBP'000
-------------------------------------------------------------------------------------- --------------------
Operating lease commitments as at 31 August 2019 12,917
Discounted using the incremental borrowing rate at initial application (4,365)
Inclusion of liabilities beyond break clauses 3,746
Other 357
Lease liabilities (excluding existing finance lease liabilities) at 1 September 2019 12,655
-------------------------------------------------------------------------------------- --------------------
Included within:
Current liabilities 1,618
Non-current liabilities 11,037
-------------------------------------------------------------------------------------- --------------------
12,655
-------------------------------------------------------------------------------------- --------------------
The following table shows the effect of IFRS 16 on the income
statement for the period ended 29 August 2020.
GBP'000
------------------------------------------- --------
Reduction in lease expense recognised 2,100
Depreciation on right-of-use assets (1,832)
Profit on disposal of right-of-use leases 37
Interest cost of lease liabilities (362)
Impact on Group profit before tax (57)
------------------------------------------- --------
Depreciation, profit on disposal and interest costs in the table
above exclude amounts in respect of finance leases that would have
been recognised in the income statement under IAS 17.
On transition to IFRS 16 the Group has applied the following
practical expedients permitted by the standard on a lease-by-lease
basis:
-- Accounting for leases where the lease term ends within 12
months of the date of initial application as short-term leases;
-- Exclusion of initial direct costs from the measurement of the
right-of-use asset at the date of initial application; and
-- Use of hindsight, such as in determining the lease term if
the contract contains options to extend or terminate the lease.
The Group is not required to make any transition adjustment for
leases previously classified as operating leases under IAS 17 where
the underlying asset is of low value.
The Group is also not required to reassess whether a contract
is, or contains, a lease at the date of initial application. IFRS
16 permits the Group to apply the standard only to contracts that
were previously identified as containing a lease under IAS 17 and
IFRIC 4 'Determining whether an arrangement contains a lease'.
The Group leases properties, motor vehicles, plant and machinery
and other equipment. Lease terms are negotiated on an individual
basis and contain a wide range of terms and conditions.
Prior to transition to IFRS 16 the Group classified leases as
either finance leases or operating leases in accordance with IAS
17. Payments made under operating leases were charged to the income
statement on a straight-line basis over the term of the lease.
Since transition to IFRS 16, leases are recognised as a
right-of-use asset and a corresponding liability at the date at
which the leased asset is available for use by the Group. Each
lease payment is allocated between the repayment of the lease
liability and finance cost. The finance cost is charged to the
income statement over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability
for each period. The right-of-use asset is depreciated over the
shorter of the asset's useful life and the lease term on a
straight-line basis and is also subject to regular impairment
reviews.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
-- Fixed payments (including in-substance fixed payments), less
any lease incentives receivable;
-- Variable lease payments that are based on an index or rate;
-- Amounts expected to be payable by the lessee under residual value guarantees;
-- The exercise price of a purchase option if the lessee is
reasonably certain to exercise that option; and
-- Payments of penalties for terminating the lease, if the lease
term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate
implicit in the lease. Where this cannot be determined, the
lessee's incremental borrowing rate is used, being the rate that
the lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value in a similar economic environment
with similar terms and conditions.
Right-of-use assets are measured at cost comprising the
following:
-- The amount of the initial measurement of the lease liability;
-- Any lease payments made at of before the commencement date
less any lease incentives received;
-- Any initial direct costs incurred by the lessee; and
-- Restoration costs required by the terms and conditions of the lease.
At the commencement date of property leases the Group normally
determines the lease term to be the full term of the lease,
assuming that any option to break or extend the lease is unlikely
to be exercised and it is not reasonably certain that the Group
will continue in occupation for any period beyond the lease term.
Leases are regularly reviewed and will be revalued if it becomes
likely that a break clause or option to extend the lease is
exercised.
Payments associated with short-term leases and leases of low
value assets are recognised on a straight-line basis as an expense
in the income statement. Short term leases are leases with a lease
term of 12 months or less. Low value assets generally comprise
minor office and IT equipment.
The Group acts as lessor in certain operating lease
arrangements. Rental income is recognised on a straight-line basis
in the income statement. The Group is not a lessor in any finance
lease arrangements.
2. Segmental information
The segmental information for the year ended 29 August 2020 is
as follows:
Agriculture Engineering Central Group
GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 342,627 53,020 - 395,647
Inter segment revenue (5) (12) - (17)
Revenue from external customers 342,622 53,008 - 395,630
============ ============ ======== ==========
Adjusted(1) EBITDA(2) 14,798 6,754 (781) 20,771
Depreciation, amortisation
and profit/(loss) on disposal
of non-current assets (4,031) (2,944) (182) (7,157)
Share of post-tax results
of associate and joint
ventures 2,633 - - 2,633
Adjusted(1) operating profit 13,400 3,810 (963) 16,247
Adjusting items (note 3) 42 (2,449) - (2,407)
Operating profit 13,442 1,361 (963) 13,840
------------ ------------ --------
Finance income 313
Finance costs (1,656)
Adjusted(1) profit before
taxation 14,904
Adjusting items (note 3) (2,407)
Profit before taxation 12,497
==========
(1) Adjusted results are consistent with how business
performance is measured internally and is presented to aid
comparability of performance. Adjusting items are disclosed in note
3
(2) Earnings before interest, tax, depreciation, amortisation,
profit/(loss) on the disposal of non-current
assets and share of post-tax results of associate and joint ventures
The segmental information for the year ended 31 August 2019 is
as follows. This has been restated to present central costs
separately. This is to aid comparability with the segmental
information presented for the current year.
Agriculture Engineering Central Group
GBP'000 GBP'000 GBP'000 GBP'000
Total segment revenue 357,399 46,556 - 403,955
Inter segment revenue (11) (39) - (50)
Revenue from external customers 357,388 46,517 - 403,905
============ ============ ======== ==========
Adjusted(1) EBITDA(2) 14,914 7,796 (1,554) 21,156
Depreciation, amortisation and profit/(loss)
on disposal of non-current assets (2,946) (1,879) (84) (4,909)
Share of post-tax results of associate
(adjusted(1) ) and joint ventures 2,683 - - 2,683
Adjusted(1) operating profit 14,651 5,917 (1,638) 18,930
Adjusting items (note 3) (531) 65 (1,269) (1,735)
Operating profit 14,120 5,982 (2,907) 17,195
------------ ------------ --------
Finance income 463
Finance costs (1,349)
Adjusted(1) profit before taxation 18,044
Adjusting items (note 3) (1,735)
Profit before taxation 16,309
==========
(1) Adjusted results are consistent with how business
performance is measured internally and is presented to aid
comparability of performance. Adjusting items are disclosed in note
3
(2) Earnings before interest, tax, depreciation, amortisation,
profit/(loss) on the disposal of non-current assets and share of
post-tax results of associate and joint ventures
3. Adjusting items
In reporting financial information, the Group presents
alternative performance measures (APMs), which are not defined or
specified under the requirements of IFRS. These APMs are consistent
with how business performance is measured internally and therefore
the Group believes that these APMs provide stakeholders with
additional useful information on the performance of the business.
The following adjusting items have been added back to reported
profit measures.
2020 2019
GBP'000 GBP'000
Amortisation of acquired intangible assets
(i) 1,380 814
Adjustments to contingent consideration
(ii) (937) (1,126)
Restructuring/closure costs (iii) 1,964 437
Business combination expenses (iv) - 509
Past service cost - Group (v) - 795
Past service cost - share of associate
(v) - 306
2,407 1,735
=================================== =============================
(i) Amortisation of acquired intangible assets which do not
relate to the underlying profitability of the Group but rather
relate to costs arising on acquisition of businesses.
(ii) Adjustments to contingent consideration arise from the
revaluation of contingent consideration in respect of acquisitions
to fair value at the year end. Movements in fair value arise from
changes to the expected payments since the previous year end based
on actual results and updated forecasts. Any increase or decrease
in fair value is recognised through the income statement.
(iii) Restructuring/closure costs include redundancy costs and
impairments of assets to recoverable amounts. The impairment to
property, plant and equipment was GBP239,000 (2019: GBPnil).
(iv) Business combination expenses relate to acquisition costs incurred.
(v) The scheme actuary's estimated effect on the Group's, and
share of associate's, pension scheme liabilities following the
equalisation of Guaranteed Minimum Pensions (GMPs). For further
details of the past service costs see note 7.
4. Taxation
2020 2019
GBP'000 GBP'000
Analysis of the charge in the year
Current tax:
UK corporation tax
Current year 1,077 1,447
Adjustment in respect of prior years (150) 45
Foreign tax
Current year 356 1,557
Adjustment in respect of prior years (217) 109
------------------ ------------------
Group current tax 1,066 3,158
------------------ ------------------
Deferred tax:
Origination and reversal of timing differences
Current year 450 (357)
Adjustment in respect of prior years 59 (116)
------------------ ------------------
Group deferred tax 509 (473)
------------------ ------------------
Tax on profit 1,575 2,685
================== ==================
Profit before taxation 12,497 16,309
------------------ ------------------
Tax at 19% (2019: 19%) 2,374 3,099
Effects of:
Tax effect of share of results of associate
and joint ventures (500) (452)
Tax effect of expenses that are not
allowable in determining taxable profit 184 180
Tax effect of non-taxable income (633) (482)
Effects of different tax rates of foreign
subsidiaries 83 256
Effects of changes in deferred tax rates 304 (24)
Unrecognised deferred tax on losses 71 70
Adjustment in respect of prior years (308) 38
------------------ ------------------
Total tax charge for the year 1,575 2,685
================== ==================
The tax effect of expenses that are not allowable in determining
taxable profit includes adjustments for share based payments,
depreciation and amortisation on non-qualifying assets, and other
expenses disallowable for UK corporation tax. The prior year also
includes business combination expenses (note 3) which were treated
as disallowable for tax purposes.
The tax effect of non-taxable income includes the adjustments to
contingent consideration (note 3) and the effect of income within
the patent box regime.
The prevailing UK corporation tax rate of 19% was substantively
enacted as part of the Finance Act 2019 on 12 March 2019. The rate
was due to reduce to 17% from April 2020, however, in the budget on
12 March 2020 it was announced that the main rate of UK corporation
tax will be held at 19%. Deferred tax is therefore provided at 19%.
UK deferred tax balances at the prior year end were provided at
17%.
5. Earnings per ordinary share
Basic earnings per share are based on profit attributable to
shareholders and on a weighted average number of shares in issue
during the year of 92,346,828 (2019: 91,828,015). The calculation
of diluted earnings per share is based on 93,731,044 shares (2019:
94,347,658).
Adjusting items disclosed in note 3 that are charged or credited
to profit do not relate to the underlying profitability of the
Group. The Board believes adjusted profit before these items
provides a useful measure of business performance. Therefore, an
adjusted earnings per share is presented as follows:
2020 2020 2019 2019
Earnings Earnings Earnings Earnings
per per
GBP'000 share pence GBP'000 share pence
Earnings per share -
basic 9,533 10.3 12,049 13.1
Adjusting items:
Amortisation of acquired
intangible assets 1,380 1.5 814 0.9
Adjustments to contingent
consideration (937) (1.0) (1,126) (1.2)
Restructuring/closure
costs 1,964 2.1 437 0.5
Business combination
expenses - - 509 0.6
Past service cost -
Group - - 795 0.9
Past service cost -
share of associate - - 306 0.3
Taxation effect of the
above (639) (0.7) (367) (0.4)
Non-controlling interest
in the above (273) (0.3) (57) (0.1)
Earnings per share -
adjusted 11,028 11.9 13,360 14.6
========= ============ ========= ============
6. Cash generated from continuing operations
2020 2019
GBP'000 GBP'000
Continuing operations
Profit for the year 10,922 13,624
Adjustments for:
Tax 1,575 2,685
Tax credit in respect of R&D (250) (526)
Depreciation of property, plant and equipment 4,567 4,804
Depreciation on right-of-use assets 2,462 -
Depreciation of investment property 6 6
Intangible asset amortisation 1,513 943
Loss/(profit) on disposal of property,
plant and equipment 265 (30)
Profit on disposal of right-of-use assets (37) -
Business combination expenses - 509
Adjustments to contingent consideration (937) (1,126)
Net fair value (credit)/charge on share
based payments (137) 880
Release of loan provision (783) -
Other non-cash adjustments (504) (139)
Interest income (313) (463)
Interest expense and borrowing costs 1,716 1,399
Share of results of associate and joint
ventures (2,633) (2,377)
IAS19 income statement charge (excluding
interest):
Administrative expenses 13 21
Past service cost - 795
Changes in working capital (excluding the
effects of acquisitions):
Decrease/(increase) in inventories 4,811 (670)
Decrease/(increase) in receivables 3,862 (1,008)
Decrease in payables (3,479) (3,323)
--------- ---------
Cash generated from continuing operations 22,639 16,004
========= =========
7. Pensions
The Group operates its current pension arrangements on a defined
benefit and defined contribution basis. The valuation of the
defined benefit scheme under the IAS19 accounting basis showed a
surplus in the scheme at 29 August 2020 of GBP8.0m (2019:
GBP7.8m).
In the year, the retirement benefit charge, excluding interest,
in respect of the Carr's Group Pension Scheme was GBP13,000 (2019:
GBP816,000). The prior year includes GBP795,000 in respect of GMP
equalisation which is discussed further below.
A Group subsidiary undertaking is a participating employer in a
defined benefit pension scheme of the associate, Carrs Billington
Agriculture (Operations) Ltd. The IAS19 accounting basis showed a
surplus for that scheme at 29 August 2020 of GBP3.5m (2019:
GBP1.9m). The scheme is treated as a defined contribution scheme by
the Group, and its level of participation in the scheme is
estimated at 48.5%, which is based on its estimated share of the
buyout liabilities. Due to the fact that the sponsoring employer is
an associate company of the Group, 49% of the surplus calculated on
an IAS19 accounting basis is included in the Group's balance sheet
within its 'Investment in associate'.
In October 2018 the High Court ruled on the case of Lloyds
Banking Group Pensions Trustees Ltd v Lloyds Bank plc and others.
This ruling required all UK defined benefit pension schemes to
equalise Guaranteed Minimum Pensions (GMPs) between males and
females. The Scheme's actuary estimated the effect on the Carr's
Group Pension Scheme liabilities to be GBP795,000 and this was
recognised as a past service cost through the Income Statement and
disclosed as an adjusting item in the prior year (note 3). The
Group also recognised its share of the effect of the GMP
equalisation on the associate's pension scheme liabilities through
its 'Share of post-tax results of associates' in the prior year.
The Group's share recognised was GBP306,000 which has also been
disclosed as an adjusting item in the prior year (note 3).
The Group continues to monitor further clarifications arising
from the High Court case.
8. Analysis of net debt
At Other At
1 September Cash Non-Cash Exchange 29
August
2019 Flow Changes Movements 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash
equivalents 28,649 (10,089) - (989) 17,571
Bank overdrafts (4,354) (2,913) - - (7,267)
------------------------ --------- ---------- ----------- -----------------------------------
24,295 (13,002) - (989) 10,304
Loans and other
borrowings:
- current (18,319) 13,615 528 23 (4,153)
- non-current (26,846) 1,463 (60) 422 (25,021)
Net debt
(excluding
leases) (20,870) 2,076 468 (544) (18,870)
======================== ========= ========== =========== ===================================
Finance leases
(IAS 17):
- current (1,183)
- non-current (1,740)
------------------------
Net debt
(including
leases) (23,793)
========================
9. Alternative performance measures glossary
The Preliminary Announcement includes alternative performance
measures (APMs), which are not defined or specified under the
requirements of IFRS. These APMs are consistent with how business
performance is measured internally and therefore the Directors
believe that these APMs provide stakeholders with additional useful
information on the Group's performance.
Alternative performance
measure Definition and comments
------------------------ ------------------------------------------------------
Adjusted EBITDA Earnings before interest, tax, depreciation,
amortisation, profit/(loss) on the disposal
of non-current assets, share of post-tax results
of the associate and joint ventures and excluding
items regarded by the Directors as adjusting
items. This measure is reconciled to statutory
operating profit and statutory profit before
taxation in note 2. EBITDA allows the user
to assess the profitability of the Group's
core operations before the impact of capital
structure, debt financing and non-cash items
such as depreciation and amortisation.
------------------------ ------------------------------------------------------
Adjusted operating Operating profit after adding back items regarded
profit by the Directors as adjusting items. This
measure is reconciled to statutory operating
profit in the income statement and note 2.
Adjusted results are presented because if
included, these adjusting items could distort
the understanding of the Group's performance
for the year and the comparability between
the years presented.
------------------------ ------------------------------------------------------
Adjusted profit Profit before taxation after adding back items
before taxation regarded by the Directors as adjusting items.
This measure is reconciled to statutory profit
before taxation in the income statement and
note 2. Adjusted results are presented because
if included, these adjusting items could distort
the understanding of the Group's performance
for the year and the comparability between
the years presented.
------------------------ ------------------------------------------------------
Adjusted earnings Profit attributable to the equity holders
per share of the Company after adding back items regarded
by the Directors as adjusting items after
tax divided by the weighted average number
of ordinary shares in issue during the year.
This is reconciled to basic earnings per share
in note 5.
------------------------ ------------------------------------------------------
Net debt The net position of the Group's cash at bank
and borrowings. Details of the movement in
net debt is shown in note 8.
------------------------ ------------------------------------------------------
10. Adoption of IFRS 16 'Leases'
The Group adopted IFRS 16 with effect from 1 September 2019 and
has applied IFRS 16 using the modified retrospective approach with
the cumulative effect of initially applying the standard recognised
at the date of initial application. Comparative information has not
been restated and is therefore still reported under IAS 17.
Adjustments to the opening balance sheet arising from the
adoption of IFRS 16 are as follows.
31 August 2019 Adjustments 1 September 2019
GBP'000 GBP'000 GBP'000
------------------------------- --------------------
Non-current assets
Property, plant and equipment 41,917 (4,409) 37,508
Right-of-use assets - 15,903 15,903
Current assets
Trade and other receivables 56,349 (776) 55,573
Current liabilities
Borrowings (23,856) 1,183 (22,673)
Leases - (2,801) (2,801)
Trade and other payables (62,653) 229 (62,424)
Non-current liabilities
Borrowings (28,586) 1,740 (26,846)
Leases - (12,777) (12,777)
Deferred tax liabilities (4,987) 266 (4,721)
Equity
Retained earnings 94,864 (931) 93,933
Non-controlling interests 16,740 (511) 16,229
Headline figures
Non-current assets 115,616 11,494 127,110
Current assets 140,734 (776) 139,958
Total assets 256,350 10,718 267,068
Current liabilities (88,788) (1,389) (90,177)
Non-current liabilities (36,572) (10,771) (47,343)
Total liabilities (125,360) (12,160) (137,520)
Net assets 130,990 (1,442) 129,548
Total shareholders' equity 114,250 (931) 113,319
Total equity 130,990 (1,442) 129,548
The adjustments to the opening position reflect the recognition
of GBP11.5m right-of-use assets previously accounted for as
operating leases under IAS 17 together with GBP4.4m of existing
assets held under finance lease arrangements reclassified to the
new balance sheet category of right-of-use assets. Prepayments and
accruals in respect of leases recognised on the balance sheet as at
31 August 2019 have been removed and additional lease liabilities
of GBP12.7m have been recognised in respect of leases previously
accounted for as operating leases under IAS 17. Finance lease
liabilities of GBP2.9m have been reclassified from borrowings to
leases on transition.
To enable users of these accounts to compare the years presented
in this preliminary announcement the following table shows the
balance sheet of the Group as at 29 August 2020 as though IAS 17
still applied .
29 August 2020 29 August 2020
(as reported) Adjustments (IAS 17)
GBP'000 GBP'000 GBP'000
------------------------------- --------------
Non-current assets
Property, plant and equipment 38,259 4,851 43,110
Right-of-use assets 14,856 (14,856) -
Current assets
Trade and other receivables 51,686 806 52,492
Current tax assets 1,535 (17) 1,518
Current liabilities
Borrowings (11,420) (1,259) (12,679)
Leases (2,778) 2,778 -
Trade and other payables (55,522) (175) (55,697)
Non-current liabilities
Borrowings (25,021) (1,558) (26,579)
Leases (11,171) 11,171 -
Deferred tax liabilities (4,873) (285) (5,158)
Equity
Retained earnings 101,202 1,029 102,231
Non-controlling interests 17,043 427 17,470
Headline figures
Non-current assets 127,473 (10,005) 117,468
Current assets 119,870 789 120,659
Total assets 247,343 (9,216) 238,127
Current liabilities (70,814) 1,344 (69,470)
Non-current liabilities (42,360) 9,328 (33,032)
Total liabilities (113,174) 10,672 (102,502)
Net assets 134,169 1,456 135,625
Total shareholders' equity 117,126 1,029 118,155
Total equity 134,169 1,456 135,625
The adjustments to the reported figures as at 29 August 2020
reflect the de-recognition of right-of-use assets and lease
liabilities except for finance leases that would have been
capitalised under IAS 17. It also reinstates prepayments in respect
of lease premiums paid at the commencement of the lease together
with prepayments and accruals in respect of the regular lease
payments for those leases that were accounted for as operating
leases under IAS 17.
11. The Board of Directors approved the preliminary announcement on 23 November 2020.
12. The Company intends to provide a copy of the Report and
Accounts to shareholders by 9 December 2020. The full Report and
Accounts will also be available upon request from the Company
Secretary, Carr's Group plc, Old Croft, Stanwix, Carlisle, CA3 9BA
or alternatively on the Company's website: www.carrsgroup.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR EAPFEAASEFFA
(END) Dow Jones Newswires
November 23, 2020 02:00 ET (07:00 GMT)
Carr's (LSE:CARR)
Historical Stock Chart
From Apr 2024 to May 2024
Carr's (LSE:CARR)
Historical Stock Chart
From May 2023 to May 2024
