TIDMCARR
RNS Number : 0928W
Carr's Group PLC
21 April 2021
21 April 2021
CARR'S GROUP PLC ("Carr's" or the "Group")
INTERIM RESULTS
For the 26 weeks ended 27 February 2021
"An improved H1 performance in a challenging environment"
Carr's (CARR.L), the Agriculture and Engineering Group,
announces its Interim Results for the 26 weeks ended 27 February
2021.
Financial highlights
Adjusted(1) Adjusted(1) +/-
H1 2021 H1 2020
Revenue (GBPm) 201.4 200.0 +0.7%
Adjusted(1) operating
profit (GBPm) 10.9 10.3 +5.3%
Adjusted(1) profit
before tax (GBPm) 10.4 9.6 +8.1%
Adjusted(1) EPS (p) 8.2 8.0 +2.5%
Net debt (2) (GBPm) 10.6 25.4 -58.5%
Statutory Statutory +/-
H1 2021 H1 2020
Revenue (GBPm) 201.4 200.0 +0.7%
Operating profit (GBPm) 10.7 11.2 -5.1%
Profit before tax (GBPm) 10.2 10.5 -3.2%
Basic EPS (p) 8.2 9.3 -11.8%
Interim dividend (p) 1.175 - N/A
Highlights
-- Initial business review complete following appointment of new CEO.
-- Group now structured in three divisions: Speciality Agriculture (feed blocks, minerals, and trace element boluses,
formerly Supplements), Agricultural Supplies (formerly UK Agriculture) and Engineering.
-- Resilient business model despite COVID-19 and Brexit uncertainty - all agricultural stores and manufacturing
facilities operational throughout.
-- Strong performance from Speciality Agriculture and Agricultural Supplies.
-- Engineering adversely impacted by low oil prices and travel restrictions in H1 but expected to be significantly
better in H2. Order book now stands at GBP44m, increased by 19% since year end and order intake now improving.
-- Business improvement programme initiated to simplify, standardise, and generate synergies between business units
in each division.
-- Reportable accident frequency rate reduced compared to last year and COVID-19 controls remain effective.
1 Adjusted results are consistent with how business performance
is measured internally and are presented to aid comparability Page
1 of performance. Adjusting items are disclosed in note 8.
2 Excluding leases. Further details of net debt can be found in note 12.
Outlook
A continued positive performance is forecast across the
Agricultural divisions together with an improved second half in the
Engineering division as the impact of COVID-19 begins to recede and
its order intake continues to increase. A programme of
simplification and standardisation is forecast to improve
performance over time. Trading since 27 February 2021 has been
positive and the Board's expectations for the current financial
year remain unchanged.
Hugh Pelham, Chief Executive Officer, commented:
"Despite a challenging operational environment with significant
headwinds experienced in Engineering we have delivered an improved
performance compared to the same period last year. Our Speciality
Agriculture and Agricultural Supplies divisions have performed
particularly strongly. The outlook for Engineering is for an
improved performance in the second half of the financial year.
"I have been fortunate to inherit some sound foundations from my
predecessor, Tim Davies. Carr's Group owns a portfolio of good
businesses with strong market positions.
"Our people have responded brilliantly to the challenge of
working in a COVID-19 environment. I would like to thank them for
their commitment and dedication in keeping all our stores, fuel
depots and manufacturing operations running in such difficult
times.
"An initial operating review has been conducted and the Group is
now structured in three divisions: Speciality Agriculture,
Agricultural Supplies and Engineering to create greater operational
efficiencies, market focus and provide greater transparency for
investors. The results of our Speciality Agriculture division
demonstrate the quality of our products in the feed block, minerals
and animal health markets.
"Actions have been taken to strengthen reporting and governance
systems within the business as part of a process to identify
opportunities for improvement.
"Considerable opportunity exists to optimise the current
portfolio through a process of standardisation, simplification and
seeking synergies between similar businesses. Growth can be
achieved through a mixture of geographic expansion, selling all our
service lines to our customer base, and acquisition and potential
industry consolidation.
"I am confident that the Group will continue to deliver a
resilient and improving set of results over time."
Enquiries:
Carr's Group plc Tel: +44 (0) 1228 554600
Hugh Pelham (Chief Executive Officer)
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. Carr's operates a
decentralised business model that empowers operating subsidiaries
enabling them to be competitive, agile, and effective in their
individual markets whilst setting overall standards and goals.
Its Speciality Agriculture division manufactures and supplies
feed blocks, minerals and boluses containing trace metals and
minerals for livestock.
Its Agricultural Supplies division manufactures compound animal
feed, distributes farm machinery and runs a UK network of rural
stores, providing a one-stop shop for the farming community.
Its Engineering division designs and manufactures pressure
vessels, manufactures precision components from specialist steel
alloys, manufactures robotic manipulators, and provides engineering
design, assembly, and installation services for the nuclear,
defence and oil & gas industries.
INTERIM MANAGEMENT REPORT
HSE AND COVID-19
The health, safety and wellbeing of our employees and customers
is of paramount importance. We continue to follow Government
guidelines and maintain rigorous social distancing controls,
hygiene measures and shift-working practices across all
locations.
The reportable accident frequency rate compared to last year has
declined and various improvements in health, safety, and
environmental management systems across the Group have been
implemented.
The impact of the COVID-19 pandemic on the Group remains under
close review by the Board. The Group has successfully implemented a
range of measures and planned contingencies across all our
businesses which are designed to minimise the impact of the
pandemic, and as a result all our manufacturing facilities have
remained fully operational. However, we have been impacted by
delays in the progress of engineering projects and restrictions on
visiting customer sites.
Given the positive trading performance during the period the
Group has not utilised the Coronavirus Job Retention Scheme and
currently has no plans to do so.
RESULTS
In challenging market conditions, Carr's has delivered an
improved performance in the period.
During the 26 weeks ended 27 February 2021 revenues increased to
GBP201.4m (H1 2020: GBP200.0m).
Adjusted operating profit of GBP10.9m (H1 2020: GBP10.3m) was
5.3% up on the prior year. Adjusted profit before tax increased by
8.1% to GBP10.4m (H1 2020: GBP9.6m). The improvement in adjusted
profits is mainly attributable to improved performances in
Speciality Agriculture and Agricultural Supplies.
Adjusted earnings per share increased by 2.5% to 8.2p (H1 2020:
8.0p).
STRATEGIC AND OPERATIONAL REVIEW
The Group has commenced a strategic and operational review. As a
result of this, its activities are now structured into three
divisions:
1. Speciality Agriculture
2. Agricultural Supplies
3. Engineering
Our strategy is to continue to invest in established businesses
with distinct value propositions or new companies with proven
technology and strong growth prospects.
We will add value by:
-- Differentiating - investing in innovative technology,
patented processes / products and better customer service.
-- Optimising - simplifying, standardising and seeking synergies
between related companies in our portfolio.
-- Consolidating - creating scale and critical mass by
consolidating similar businesses in a market sector.
-- Growing - expanding our geographic presence, cross selling to
our customer base and developing new products.
Each division has developed an initial plan in these areas, and
these will be further refined over the coming months. The Group
will continue its strategic and operational review in the second
half of this financial year.
SPECIALITY AGRICULTURE
Speciality Agriculture comprises our feed blocks, mineral
supplements and trace element boluses in the UK, Europe, North
America, and New Zealand.
H1 2021 H1 2020 % Change
Revenue GBP40.2m GBP36.6m +9.8%
Adjusted operating
profit GBP8.2m GBP6.5m +24.7%
Our businesses have performed strongly in all geographic areas
driven by strong livestock prices and more seasonal weather
patterns than prior years. Overall, 101,000 tonnes of feed blocks
and speciality minerals were sold worldwide, an increase of 8.4%
year on year. Sales revenues recovered in our animal health
business, Animax. Our project to automate the production process at
Animax continues with benefits expected in the next financial
year.
Our strategy remains to focus on molasses based feed blocks and
specialist animal health products where our patented manufacturing
processes deliver differentiated products. Initiatives to improve
processes, supply chain buying and upgrade our manufacturing plants
are underway. Growth opportunities to expand our presence in the
USA, Canada and Germany are the highest priority, as well as
developing more environmentally sustainable packaging for key
products lines.
AGRICULTURAL SUPPLIES
Agricultural Supplies comprises our Carr's Billington branded
agricultural stores, machinery, fuel and compound feed business and
our joint venture business Bibby Agriculture.
H1 2021 H1 2020 % Change
Revenue GBP137.7m GBP138.4m -0.5%
Adjusted operating
profit GBP3.3m GBP2.5m +33.5%
Total feed sales volumes increased to 318kt, an increase of 0.4%
compared to the prior year. Machinery revenues were also strong,
increasing by 29.1% year on year, and total retail sales also
increased by 4.3% with like-for-like sales showing an 8.1%
increase. Fuel volumes were down 2.5% versus the prior year, with
the main impact being felt in the first quarter of the financial
year.
Significant increases in raw material prices impacted the
profitability of the feed business in the first half, however,
margins were stronger in retail, fuel and machinery which helped
offset the impact of higher raw material costs.
In the UK specifically, the agreement of a trade deal with the
EU in December 2020 has significantly improved farmer confidence,
which has been further buoyed by strong farmgate prices. The UK
Agriculture Bill will also provide opportunities as farmers are
incentivised by efficiency and environmental schemes.
Our strategy remains to provide all a farmer needs and
differentiate ourselves through our product range, our customer and
technical service levels, having a local presence, and the quality
of our compound feeds. Operationally, a number of initiatives have
been implemented to standardise product range and prices, improve
supply chain arrangements and better manage raw material buying and
pricing. Further opportunities to grow exist through the opening of
new stores and industry consolidation.
ENGINEERING
Engineering comprises our fabrication and precision engineering
businesses in the UK, robotics businesses in the UK and Europe and
our engineering solutions businesses in the UK and USA.
H1 2021 H1 2020 % Change
Revenue GBP23.6m GBP24.9m -5.4%
Adjusted operating
profit GBP0.9m GBP1.2m -24.1%
The profitability of our engineering solutions business in the
USA and UK has been resilient with continued work with large
blue-chip customers in the nuclear and defence sectors. Additional
work has recently been secured in the defence sector.
The performance of our fabrication and precision engineering
businesses have been adversely affected by low oil & gas
prices. More positively, our fabrication business has received a
significant level of orders in the nuclear sector. A turnaround
plan is in place for the precision engineering business and
performance is expected to be significantly better in H2.
The performance of our robotics business has substantively
improved compared to H1 last year with exports to China expected to
resume in H2 2021.
Our overall Engineering order book at GBP44m (H1 2020: GBP47m)
is less than at the equivalent point last year but GBP7m higher
than at the end of 2020 (FY 2020: GBP37m). In the second half of
the prior year a significant number of orders were subsequently
cancelled following the outbreak of COVID-19.
Our strategy in the Engineering division is to provide
specialist high margin services primarily to the nuclear and
defence sectors. Our differentiators include patented MSIP(R),
Power Fluidics(TM) processes, the range of precision engineering
machinery, the product life and quality of our robotic manipulators
and a direct workforce with highly specialist welding
capabilities.
Opportunities to grow exist with our current customer base by
providing our full range of specialist services and by selectively
pursuing new customers in the nuclear and defence industries in
particular.
FINANCE REVIEW
Adjusted results
Revenue increased by 0.7% to GBP201.4m (H1 2020: GBP200.0m),
with an increase of 9.8% in Speciality Agriculture offset by a
reduction in both Engineering and Agricultural Supplies of 5.4% and
0.5% respectively.
Adjusted operating profit increased 5.3% to GBP10.9m (H1 2020:
GBP10.3m). Strong performances in Speciality Agriculture, up 24.7%,
and Agricultural Supplies, up 33.5%, were partially offset by a
reduction in Engineering of 24.1%. Central costs were higher at
GBP1.5m (H1 2020: credit of GBP0.1m) partly due to a change in
provision for a non-recoverable debt, phasing, increased costs for
performance related remuneration, and CEO handover costs.
Net finance costs of GBP0.5m (H1 2020: GBP0.7m) reduced year on
year due to lower borrowings. Net debt was GBP10.6m at the period
end (H1 2020: 25.4m), driven by a strong operating performance with
EBITDA of GBP12.6m and a reduction in working capital of GBP4.1m,
offset by dividends of GBP4.4m, net capital expenditure of GBP2.3m
and tax and interest of GBP1.9m. The Group's main banking
facilities run to 2023.
The Group's adjusted profit before tax increased by 8.1% to
GBP10.4m (H1 2020: GBP9.6m).
Adjusted earnings per share increased by 2.5% to 8.2p (H1 2020:
8.0p). The increase is proportionately lower than the increase in
profit before tax because of the higher effective tax rate, due to
a higher mix of overseas profits and the impact of minority
interests.
Adjusting items
The Group provides the adjusted profit measures referred to
above to present additional useful information on business
performance consistent with how business performance is measured
internally. These measures show underlying profits before certain
adjusting items.
In H1 2020, adjusting items were a net credit of GBP0.9m related
mainly to adjustments to contingent consideration (H1 2020: GBP2.1m
compared to H1 2021: GBP0.7m) partly offset by amortisation of
intangible assets. In H1 2021, they are a charge of GBP0.2m. Full
details of all adjusting items are given in note 8.
Statutory results
Reported operating profit on a statutory basis was GBP10.7m (H1
2020: GBP11.2m) and reported profit before tax was GBP10.2m (H1
2020: GBP10.5m). Basic earnings per share on a statutory basis was
8.2p (H1 2020: 9.3p).
Balance sheet and cash flow
Net cash generated from operating activities in the first half
was GBP14.1m (H1 2020: GBP4.9m). Net debt, excluding leases, fell
to GBP10.6m from GBP18.9m at the financial year end (H1 2020:
GBP25.4m). This is primarily related to strong working capital
management resulting in a working capital inflow of GBP4.1m
combined with improved EBITDA.
The Group's defined benefit pension scheme remains in surplus
but at a slightly decreased level of GBP7.8m compared to GBP8.0m at
29 August 2020.
Shareholder's equity
Shareholders' equity at 27 February 2021 was GBP119.0m (29
August 2020: GBP117.1m), with the increase primarily due to profit
retained by the Group for the period offset by foreign exchange
translation losses and dividends paid.
A first interim dividend of 1.175 pence per ordinary share will
be paid on 8 June 2021 to shareholders on the register on 30 April
2021. The ex-dividend date will be 29 April 2021.
GOVERNANCE
The Group announces that, with effect from today, Kristen Eshak
Weldon has been appointed as the Board's Representative for
Employee Engagement. Kristen was appointed to the Board in October
2020 and takes on the role from Alistair Wannop who will be
standing down from the Board in January 2022. Kristen is currently
Global Head of ESG and Impact Investing at Partners Capital. Prior
to this she served on the Executive Committee of Louis Dreyfus
Company and co-headed the London office of Blackstone's Hedge Fund
Solutions business. The Board considers that Kristen's experience
of stakeholder engagement places her well to ensure that wider
views across the workforce are fully understood and considered by
the Board in its decision-making processes.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group has a process in place to identify and assess the
impact of risks on its business, which is reviewed and updated
quarterly. The principal risks and uncertainties for the remainder
of the financial year are not considered to have changed materially
from those included on pages 28 to 30 of the Annual Report and
Accounts 2020 (available on the Company's website at
http://investors.carrsgroup.com ), with the exception of Brexit
where the risk has reduced following the UK-EU trade agreement
which took effect from 31 December 2020.
OUTLOOK
A continued positive performance is forecast across the
Agricultural divisions together with an improved second half in the
Engineering division as the impact of COVID-19 begins to recede and
its order intake continues to increase. A programme of
simplification and standardisation is forecast to improve
performance over time. Trading since 27 February 2021 has been
positive and the Board's expectations for the current financial
year remain unchanged.
CONDENSED CONSOLIDATED INCOME STATEMENT
For the 26 weeks ended 27 February 2021
26 weeks 52 weeks
26 weeks ended ended ended
27 February 29 February 29 August
2021 2020 2020
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------- ------ -------------------- ------------------- ---------------------
Continuing operations
Revenue 6,7 201,435 199,957 395,630
Cost of sales (173,412) (172,924) (343,381)
Gross profit 28,023 27,033 52,249
Net operating expenses (19,547) (17,685) (41,042)
Share of post-tax results of associate and
joint ventures 2,196 1,892 2,633
Adjusted (1) operating profit 6 10,869 10,322 16,247
Adjusting items 8 (197) 918 (2,407)
-------------------------------------------- ------ -------------------- ------------------- ---------------------
Operating profit 6 10,672 11,240 13,840
Finance income 135 178 313
Finance costs (633) (905) (1,656)
Adjusted (1) profit before taxation 6 10,371 9,595 14,904
Adjusting items 8 (197) 918 (2,407)
-------------------------------------------- ------ -------------------- ------------------- ---------------------
Profit before taxation 6 10,174 10,513 12,497
Taxation (1,714) (1,382) (1,575)
Profit for the period 8,460 9,131 10,922
-------------------------------------------- ------ -------------------- ------------------- ---------------------
Profit attributable to:
Equity shareholders 7,574 8,565 9,533
Non-controlling interests 886 566 1,389
8,460 9,131 10,922
-------------------------------------------- ------ -------------------- ------------------- ---------------------
Earnings per share (pence)
Basic 9 8.2 9.3 10.3
Diluted 9 7.9 9.1 10.2
Adjusted (1) 9 8.2 8.0 11.9
Diluted adjusted (1) 9 8.0 7.9 11.8
1 Adjusted results are consistent with how business performance
is measured internally and is presented to aid comparability of
performance. Adjusting items are discussed in note 8. An
alternative performance measures glossary can be found in note
18.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 26 weeks ended 27 February 2021
26 weeks ended 52 weeks
27 February Ended
2021 26 weeks ended 29 August
(unaudited) 29 February 2020 2020
(unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
----------------------------------------------------------- ------ ---------------- ------------------ -----------
Profit for the period 8,460 9,131 10,922
----------------------------------------------------------- ------ ---------------- ------------------ -----------
Other comprehensive (expense)/income
Items that may be reclassified subsequently to profit or
loss:
Foreign exchange translation losses arising on
translation of overseas subsidiaries (1,752) (2,778) (2,552)
Net investment hedges 76 210 (54)
Taxation (charge)/credit on net investment hedges (14) (40) 10
Items that will not be reclassified subsequently to profit
or loss:
Actuarial (losses)/gains on retirement benefit asset:
- Group 14 (295) (1,187) 142
- Share of associate - - 408
Taxation credit/(charge) on actuarial (losses)/gains on
retirement benefit asset:
- Group 56 202 (27)
- Share of associate - - (96)
Other comprehensive expense for the period, net of tax (1,929) (3,593) (2,169)
------------------------------------------------------------------- ---------------- ------------------ -----------
Total comprehensive income for the period 6,531 5,538 8,753
----------------------------------------------------------- ------ ---------------- ------------------ -----------
Total comprehensive income attributable to:
Equity shareholders 5,645 4,972 7,364
Non-controlling interests 886 566 1,389
6,531 5,538 8,753
----------------------------------------------------------- ------ ---------------- ------------------ -----------
CONDENSED CONSOLIDATED BALANCE SHEET
As at 27 February 2021
As at As at As at
27 February 29 February 29 August
2021 2020 2020
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Non-current assets
Goodwill 11 31,530 32,070 32,041
Other intangible assets 11 9,118 9,315 9,171
Property, plant and
equipment 11 35,609 36,767 38,259
Right-of-use assets 11 16,265 15,870 14,856
Investment property 11 155 161 158
Investment in associate 14,860 13,846 14,307
Interest in joint ventures 11,492 10,392 10,551
Other investments 72 74 73
Financial assets
- Non-current receivables 20 21 20
Retirement benefit asset 14 7,807 6,643 8,037
Deferred tax assets - 410 -
126,928 125,569 127,473
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Current assets
Inventories 43,392 48,915 40,961
Contract assets 7,885 8,412 8,114
Trade and other receivables 59,496 60,537 51,686
Current tax assets 2,058 328 1,535
Financial assets
- Derivative financial
instruments - - 3
- Cash and cash equivalents 12 24,838 29,318 17,571
137,669 147,510 119,870
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Total assets 264,597 273,079 247,343
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Current liabilities
Financial liabilities
- Borrowings 12 (8,580) (26,855) (11,420)
- Leases (2,965) (2,557) (2,778)
Contract liabilities (3,019) (2,351) (1,061)
Trade and other payables (67,704) (62,520) (55,522)
Current tax liabilities (494) (158) (33)
---------------------------- ------ ------------------------------------ ------------- ---------------------------
(82,762) (94,441) (70,814)
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Non-current liabilities
Financial liabilities
- Borrowings 12 (26,815) (27,896) (25,021)
- Leases (12,177) (12,666) (11,171)
Deferred tax liabilities (4,830) (4,634) (4,783)
Other non-current
liabilities (1,370) (2,537) (1,385)
(45,192) (47,733) (42,360)
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Total liabilities (127,954) (142,174) (113,174)
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Net assets 136,643 130,905 134,169
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Shareholders' equity
Share capital 15 2,330 2,312 2,312
Share premium 15 9,613 9,165 9,176
Other reserves 2,363 4,379 4,436
Retained earnings 104,741 98,655 101,202
---------------------------- ------ ------------------------------------ ------------- ---------------------------
Total shareholders' equity 119,047 114,511 117,126
Non-controlling interests 17,596 16,394 17,043
Total equity 136,643 130,905 134,169
---------------------------- ------ ------------------------------------ ------------- ---------------------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 26 weeks ended 27 February 2021
Foreign Exchange
Share Premium Treasury Equity Reserve Retained Total Non- Total
Share Share Reserve Compensation Other Reserve Earnings Shareholders' Controlling Equity
Capital Reserve Equity Interests
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
At 30 August 2020
(audited) 2,312 9,176 (45) 734 3,550 197 101,202 117,126 17,043 134,169
Profit for the
period - - - - - - 7,574 7,574 886 8,460
Other comprehensive
expense - - - - (1,690) - (239) (1,929) - (1,929)
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
Total comprehensive
(expense)/income - - - - (1,690) - 7,335 5,645 886 6,531
Dividends paid - - - - - - (4,390) (4,390) (368) (4,758)
Equity-settled
share-based payment
transactions - - - (426) - - 646 220 35 255
Allotment of shares 18 437 - - - - - 455 - 455
Purchase of own
shares held in
trust - - (9) - - - - (9) - (9)
Transfer - - 53 - - (1) (52) - - -
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
At 27 February 2021
(unaudited) 2,330 9,613 (1) 308 1,860 196 104,741 119,047 17,596 136,643
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
At 1 September 2019
(audited) 2,299 9,165 - 1,577 6,146 199 93,771 113,157 16,125 129,282
Profit for the
period - - - - - - 8,565 8,565 566 9,131
Other comprehensive
expense - - - - (2,608) - (985) (3,593) - (3,593)
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
Total comprehensive
(expense)/income - - - - (2,608) - 7,580 4,972 566 5,538
Dividends paid - - - - - - (3,344) (3,344) (294) (3,638)
Equity-settled
share-based payment
transactions - - - (933) - - 659 (274) (3) (277)
Allotment of shares 13 - - - - - - 13 - 13
Purchase of own
shares held in
trust - - (13) - - - - (13) - (13)
Transfer - - 12 - - (1) (11) - - -
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
At 29 February 2020
(unaudited) 2,312 9,165 (1) 644 3,538 198 98,655 114,511 16,394 130,905
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
At 1 September 2019
(audited) 2,299 9,165 - 1,577 6,146 199 93,933 113,319 16,229 129,548
Profit for the
period - - - - - - 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
(audited) 2,312 9,176 (45) 734 3,550 197 101,202 117,126 17,043 134,169
--------------------- ------------------------- ------------------- ------------------ ------------------------------ ------------------ ------------------ ------------ --------------------------- ----------------------- ----------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the 26 weeks ended 27 February 2021
26 weeks ended 26 weeks ended 52 weeks ended
27 February 2021 29 February 2020 29 August 2020
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Cash flows from
operating activities
Cash generated from
continuing
operations 16 15,956 7,840 22,639
Interest received 57 111 176
Interest paid (625) (897) (1,696)
Tax paid (1,300) (2,139) (3,059)
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Net cash generated 14,088 4,915 18,060
from operating
activities
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Cash flows from
investing activities
Contingent/deferred (131) (1,596) (2,659)
consideration paid
Dividends received 368 294 701
from associate and
joint ventures
Other loans - 382 718
Purchase of (780) (845) (1,459)
intangible assets
Proceeds from sale 125 141 421
of property, plant
and equipment
Purchase of (1,645) (2,569) (6,569)
property, plant and
equipment
Purchase of own (9) (13) (58)
shares held in trust
Net cash used in (2,072) (4,206) (8,905)
investing activities
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Cash flows from
financing activities
Proceeds from issue 455 13 24
of ordinary share
capital
New financing and 5,609 2,500 1,889
movement on RCF
Lease principal (1,556) (1,569) (3,171)
repayments
Repayment of (1,200) (1,247) (2,459)
borrowings
(Decrease)/increase (604) 114 (14,508)
in other borrowings
Dividends paid to (4,390) (3,344) (3,344)
shareholders
Dividends paid to (368) (294) (588)
related party
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Net cash used in (2,054) (3,827) (22,157)
financing activities
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Effects of exchange (373) (410) (989)
rate changes
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Net 9,589 (3,528) (13,991)
increase/(decrease)
in cash and cash
equivalents
Cash and cash
equivalents at
beginning of the
period 10,304 24,295 24,295
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Cash and cash
equivalents at end
of the period 19,893 20,767 10,304
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Cash and cash
equivalents consist
of:
Cash and cash
equivalents per the
balance sheet 24,838 29,318 17,571
Bank overdrafts (4,945) (8,551) (7,267)
included in
borrowings
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
19,893 20,767 10,304
--------------------- ------ -------------------------------------------- ---------------------------------------------- -----------------------------------------------
Statement of Directors' responsibilities
We confirm that to the best of our knowledge:
-- the condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the European Union ("EU") pursuant to Regulation (EC) No 1606/2002 as it applies in the
EU and in accordance with international accounting standards in conformity with the requirements of the Companies
Act 2006; and
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed consolidated financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in the last Annual Report that could do so.
The Directors are listed in the Annual Report and Accounts 2020,
with the exception of the following changes in the period: Hugh
Pelham was appointed on 4 January 2021, and Tim Davies resigned on
12 January 2021. Kristen Eshak Weldon was appointed on 1 October
2020 and was included in the list of Directors in the Annual Report
and Accounts 2020. A list of current Directors is maintained on the
website: www.carrsgroup.com
On behalf of the Board
Hugh Pelham Neil Austin
Chief Executive Officer Chief Financial Officer
21 April 2021 21 April 2021
Unaudited notes to condensed interim financial information
1. General information
The Group operates across three divisions of Speciality
Agriculture, Agricultural Supplies and Engineering. The Company is
a public limited company, which is listed on the London Stock
Exchange and is incorporated and domiciled in the UK. The address
of the registered office is Old Croft, Stanwix, Carlisle, Cumbria
CA3 9BA.
These condensed interim financial statements were approved for
issue on 21 April 2021.
The comparative figures for the financial year ended 29 August
2020 are not the Company's statutory accounts for that financial
year. Those accounts have been reported on by the Company's auditor
and delivered to the Registrar of Companies. The report of the
auditor was (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.
2. Basis of preparation
These condensed interim financial statements for the 26 weeks
ended 27 February 2021 have been prepared in accordance with IAS
34, 'Interim financial reporting' as adopted by the EU pursuant to
Regulation (EC) No 1606/2002 as it applies to the EU.
The annual financial statements of the Group for the year ending
28 August 2021 will be prepared in accordance with International
Financial Reporting Standards (IFRSs) adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the EU and in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. As required by the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority, this condensed set of financial statements has been
prepared applying the accounting policies and presentation that
were applied in the preparation of the Company's published
consolidated financial statements for the year ended 29 August 2020
which were prepared in accordance with IFRSs as adopted by the
EU.
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 the signing date
of these condensed consolidated interim financial statements. The
Group has operated within all its banking covenants throughout the
period. In addition, the Group's main banking facility is in place
until November 2023 and an invoice discounting facility is in place
until August 2023.
Detailed cash forecasts continue to be updated regularly for a
period of at least 12 months from the reporting period end. These
forecasts are sensitised for various worst case scenarios including
a COVID-19 outbreak resulting in a short term closure, delays on
order books, and reduced payments from customers. 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 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.
Consequently, the Directors are confident that the Group will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the signing date of these
condensed consolidated interim financial statements. The Group
therefore continues to adopt the going concern basis in preparing
its condensed consolidated interim financial statements.
3. Accounting policies
The accounting policies adopted are consistent with those of the
previous financial year except for:
Taxation
Income taxes are accrued based on management's estimate of the
weighted average annual income tax rate expected for the full
financial year based on enacted or substantively enacted tax rates
at 27 February 2021. Our effective tax rate was 21.1% (H1 2020:
19.1%) after adjusting for results from associate and joint
ventures, which are reported net of tax, and adjustments to
contingent consideration (note 8) which is treated as non-taxable.
The higher effective tax rate is due to a higher mix of overseas
profits.
4. Significant judgements and estimates
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these condensed interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the 52 weeks ended 29 August 2020, with the
exception of changes in estimates that are required in determining
the provision for income taxes as explained in note 3.
5. Financial risk management
The Group's activities expose it to a variety of financial
risks: market risk (including currency risk and price risk), credit
risk and liquidity risk.
The condensed interim financial statements do not include all
financial risk management information and disclosures required in
the annual financial statements; they should be read in conjunction
with the Group's annual financial statements as at 29 August 2020.
The impact of COVID-19 is discussed further in the interim
management report.
6. Operating segment information
The Group's chief operating decision-maker ("CODM") has been
identified as the Executive Directors. Management has determined
the operating segments based on the information reviewed by the
CODM for the purposes of allocating resources and assessing
performance.
The CODM considers the business from a product/services
perspective. Following a strategic and operational review
reportable operating segments have been identified as Speciality
Agriculture, Agricultural Supplies and Engineering. Central
comprises the central business activities of the Group's head
office, which earns no external revenues. Performance is assessed
using operating profit. For internal purposes the CODM assesses
operating profit before material adjusting items (note 8)
consistent with the presentation in the financial statements. The
CODM believes this measure provides a better reflection of the
Group's underlying performance. Sales between segments are carried
out at arm's length.
The following tables present revenue, profit, asset and
liability information regarding the Group's operating segments for
the 26 weeks ended 27 February 2021 and the comparative
periods.
26 weeks ended
27 February Speciality Agricultural
2021 Agriculture Supplies Engineering Central Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment
revenue 44,075 137,687 23,565 - 205,327
Inter segment
revenue (3,888) (3) (1) - (3,892)
------------------- -------------------- ------------------- ----------------
Revenue from
external
customers 40,187 137,684 23,564 - 201,435
----------------- ------------------- -------------------- ------------------- ----------------
Adjusted(1)
EBITDA(2) 7,885 3,466 2,205 (1,404) 12,152
Depreciation,
amortisation
and
profit/(loss)
on disposal of
non-current
assets (785) (1,320) (1,283) (91) (3,479)
Share of
post-tax
results
of associate
and joint
ventures 1,054 1,142 - - 2,196
Adjusted(1)
operating
profit 8,154 3,288 922 (1,495) 10,869
Adjusting items
(note 8) (245) - 78 (30) (197)
----------------- ----------------- ------------------- -------------------- ------------------- ----------------
Operating profit 7,909 3,288 1,000 (1,525) 10,672
----------------- ------------------- -------------------- -------------------
Finance income 135
Finance costs (633)
----------------
Adjusted(1)
profit before
taxation 10,371
Adjusting items
(note 8) (197)
----------------- ----------------- ------------------- -------------------- ------------------- ----------------
Profit before
taxation 10,174
----------------
Segment gross
assets 49,348 112,686 78,421 24,142 264,597
----------------- ------------------- -------------------- ------------------- ----------------
Segment gross liabilities (11,497) (56,126) (28,591) (31,740) (127,954)
--------------- --------------- ---------------- --------------- -------------
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 8.
(2) Earnings before interest, tax, depreciation, amortisation,
profit/(loss) on the disposal of non-current assets and before
share of post-tax results of associate and joint ventures.
The following tables have been restated to present Speciality
Agriculture and Agricultural Supplies separately. This is to aid
comparability with the segmental information presented for the
current period to 27 February 2021.
26 weeks ended
29 February Speciality Agricultural
2020 Agriculture Supplies Engineering Central Group
(restated) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total segment
revenue 39,909 138,445 24,919 - 203,273
Inter segment
revenue (3,311) (4) (1) - (3,316)
------------------- -------------------- --------------------------- ----------------
Revenue from
external
customers 36,598 138,441 24,918 - 199,957
---------------- ------------------- -------------------- --------------------------- ----------------
Adjusted(1)
EBITDA(2) 6,211 2,840 2,492 195 11,738
Depreciation,
amortisation
and
profit/(loss)
on disposal
of
non-current
assets (640) (1,302) (1,277) (89) (3,308)
Share of
post-tax
results of
associate and
joint
ventures 967 925 - - 1,892
Adjusted(1)
operating
profit 6,538 2,463 1,215 106 10,322
Adjusting
items (note
8) 1,068 (74) (76) - 918
--------------- ---------------- ------------------- -------------------- --------------------------- ----------------
Operating
profit 7,606 2,389 1,139 106 11,240
---------------- ------------------- -------------------- ---------------------------
Finance income 178
Finance costs (905)
----------------
Adjusted(1)
profit before
taxation 9,595
Adjusting
items (note
8) 918
--------------- ---------------- ------------------- -------------------- --------------------------- ----------------
Profit before
taxation 10,513
----------------
Segment gross
assets 49,098 121,952 83,786 18,243 273,079
---------------- ------------------- -------------------- --------------------------- ----------------
Segment gross liabilities (10,574) (70,122) (30,896) (30,582) (142,174)
--------------- --------------- ---------------- --------------- -------------
52 weeks ended
29 August 2020 Speciality Agricultural Central
(restated) Agriculture Supplies Engineering GBP'000 Group
GBP'000 GBP'000 GBP'000 GBP'000
Total segment
revenue 66,948 280,740 53,020 - 400,708
Inter segment
revenue (5,058) (8) (12) - (5,078)
------------------- -------------------- --------------------------- ---------------
Revenue from
external
customers 61,890 280,732 53,008 - 395,630
---------------- ------------------- -------------------- --------------------------- ---------------
Adjusted(1)
EBITDA(2) 7,914 6,884 6,754 (781) 20,771
Depreciation,
amortisation
and
profit/(loss)
on disposal
of
non-current
assets (1,366) (2,665) (2,944) (182) (7,157)
Share of
post-tax
results of
associate and
joint
ventures 1,061 1,572 - - 2,633
Adjusted(1)
operating
profit 7,609 5,791 3,810 (963) 16,247
Adjusting
items (note
8) 730 (688) (2,449) - (2,407)
--------------- ---------------- ------------------- -------------------- --------------------------- ---------------
Operating
profit 8,339 5,103 1,361 (963) 13,840
---------------- ------------------- -------------------- ---------------------------
Finance income 313
Finance costs (1,656)
---------------
Adjusted(1)
profit before
taxation 14,904
Adjusting
items (note
8) (2,407)
--------------- ---------------- ------------------- -------------------- --------------------------- ---------------
Profit before
taxation 12,497
---------------
Segment gross
assets 47,367 98,046 83,852 18,078 247,343
---------------- ------------------- -------------------- --------------------------- ---------------
Segment gross liabilities (8,845) (44,664) (31,156) (28,509) (113,174)
---------------- --------------- ---------------- --------------- -------------
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 8.
(2) Earnings before interest, tax, depreciation, amortisation,
profit/(loss) on the disposal of non-current assets and before
share of post-tax results of associate and joint ventures.
7. Disaggregation of revenue
The following table presents the Group's reported revenue
disaggregated based on the timing of revenue recognition.
26 weeks 26 weeksended 52 weeks
ended 29 February ended
27 February 2020 29 August
2021 2020
Timing of revenue recognition GBP'000 GBP'000 GBP'000
------------------------------- ------------- -------------- -----------
Over time 18,464 16,054 34,790
At a point in time 182,971 183,903 360,840
201,435 199,957 395,630
------------------------------- ------------- -------------- -----------
8. Adjusting items
26 weeks 26 weeks 52 weeks
ended ended ended
27 29 February 29 August
February 2020 2020
2021 GBP'000 GBP'000
GBP'000
--------------------------------- ---------------------------------------------- ------------- --------------------
Amortisation of acquired
intangible assets (i) 621 687 1,380
Adjustments to contingent
consideration (ii) (671) (2,147) (937)
Restructuring/closure costs
(iii) 247 542 1,964
197 (918) 2,407
--------------------------------- ---------------------------------------------- ------------- --------------------
(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 period end. Movements in fair value arise from
changes to the expected payments since the previous period 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.
9. Earnings per share
Adjusting items disclosed in note 8 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:
26 weeks 26 weeks 52 weeks
ended ended ended
27 February 29 February 29 August
2021 2020 2020
GBP'000 GBP'000 GBP'000
----------------------- --------------------------------- ---------------------------------- ------------------------------------
Earnings 7,574 8,565 9,533
Adjusting items:
Amortisation of
acquired intangible
assets 621 687 1,380
Adjustments to
contingent
consideration (671) (2,147) (937)
Restructuring/closure
costs 247 542 1,964
Taxation effect of the
above (167) (225) (639)
Non-controlling
interest in the above - (29) (273)
Earnings - adjusted 7,604 7,393 11,028
----------------------- --------------------------------- ---------------------------------- ------------------------------------
Number Number Number
----------------------- --------------------------------- ---------------------------------- ------------------------------------
Weighted average
number of ordinary
shares in issue 92,588,219 92,214,566 92,346,828
Potentially dilutive
share options 2,813,125 1,669,575 1,384,216
95,401,344 93,884,141 93,731,044
----------------------- --------------------------------- ---------------------------------- ------------------------------------
Earnings per share
(pence)
Basic 8.2p 9.3p 10.3p
Diluted 7.9p 9.1p 10.2p
Adjusted 8.2p 8.0p 11.9p
Diluted adjusted 8.0p 7.9p 11.8p
10. Dividends
An interim dividend of GBP2,079,551 (H1 2020: GBP1,034,348) that
related to the period to 29 August 2020 was paid on 2 October 2020.
This included the deferred first interim dividend that, under
normal circumstances, would have been paid in May 2020. This was
deferred due to the uncertainty associated with the COVID-19
pandemic. A final dividend of GBP2,310,612 (H1 2020: GBP2,310,140)
in respect of the period to 29 August 2020 was paid on 15 January
2021.
11. Intangible assets, property, plant and equipment,
right-of-use assets and investment property
Other Property, Right-of-use Investment
intangible plant and assets property
Goodwill assets equipment GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
---------------- ------------------ -------------------------- ---------------- --------------- --------------------
26 weeks ended
27 February
2021
Opening net
book amount
at 30 August
2020 32,041 9,171 38,259 14,856 158
Exchange
differences (511) (52) (570) (17) -
Additions - 780 1,628 1,818 -
Disposals and
transfers - - (1,748) 861 -
Depreciation
and
amortisation - (781) (1,960) (1,253) (3)
---------------- ------------------ -------------------------- ---------------- --------------- --------------------
Closing net
book amount
at 27 February
2021 31,530 9,118 35,609 16,265 155
---------------- ------------------ -------------------------- ---------------- --------------- --------------------
26 weeks ended
29 February
2020
Opening net
book amount
at 1 September
2019 32,877 9,318 41,917 - 164
Transition to
IFRS 16 - - (4,409) 15,903 -
Exchange
differences (807) (99) (911) (48) -
Additions - 845 2,569 1,263 -
Disposals - - (90) - -
Depreciation,
amortisation
and impairment - (749) (2,309) (1,248) (3)
---------------- ------------------ -------------------------- ---------------- --------------- --------------------
Closing net
book amount
as at 29
February 2020 32,070 9,315 36,767 15,870 161
---------------- ------------------ -------------------------- ---------------- --------------- --------------------
Transfers include assets refinanced under a lease and finance
leased assets that became owned assets on maturity of the lease
term.
Capital commitments contracted, but not provided for, by the
Group at the period end amounts to GBP632,000 (2020:
GBP1,559,000).
12. Borrowings
As at As at As at
27 29 29
February February August
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------- -------------------------- ----------------------------- ------------------------------
Current 8,580 26,855 11,420
Non-current 26,815 27,896 25,021
--------------------------- -------------------------- ----------------------------- ------------------------------
Total borrowings 35,395 54,751 36,441
Cash and cash equivalents
as per the balance sheet (24,838) (29,318) (17,571)
--------------------------- -------------------------- ----------------------------- ------------------------------
Net debt (excluding
leases) 10,557 25,433 18,870
--------------------------- -------------------------- ----------------------------- ------------------------------
Undrawn facilities 35,324 22,412 35,083
--------------------------- -------------------------- ----------------------------- ------------------------------
Current borrowings include bank overdrafts of GBP4.9m (2020: GBP8.6m). Undrawn facilities
include overdraft facilities of GBP2.5m (2020: GBP2.5m) that are renewable on an annual basis.
26 weeks 26 weeks
ended ended
27 February 29 February
Movements in borrowings are analysed as follows: 2021 2020
GBP'000 GBP'000
-------------------------------------------------- ------------- -----------------------------
Balance at start of period (excluding leases) 36,441 49,519
Exchange differences (235) (362)
New bank loans/RCF drawdown 4,000 2,500
Repayments of borrowings (1,200) (1,247)
(Decrease)/increase in other borrowings (604) 114
Loan forgiven (715) -
Release of deferred borrowing costs 30 30
Net increase to bank overdraft (2,322) 4,197
-------------------------------------------------- ------------- -----------------------------
Balance at end of period 35,395 54,751
-------------------------------------------------- ------------- -----------------------------
New bank loans/RCF drawdown excludes re-financing of assets
under new finance lease arrangements. The balance of GBP49.5m at
the start of the comparative period excludes finance leases of
GBP2.9m which were previously included within borrowings as at 31
August 2019 however, on transition to IFRS 16 'Leases' on 1
September 2019, these were presented separately to borrowings on
the face of the balance sheet.
13. Financial instruments
IFRS 13 requires financial instruments that are measured at fair
value to be classified according to the valuation technique
used:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - inputs, other than Level 1 inputs, that are observable
for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices)
Level 3 - unobservable inputs
Transfers between levels are deemed to have occurred at the end
of the reporting period. There were no transfers between levels in
the above hierarchy in the period.
All derivative financial instruments are measured at fair value
using Level 2 inputs. The Group's bankers provide the valuations
for the derivative financial instruments at each reporting period
end based on mark to market valuation techniques.
Contingent consideration is measured at fair value using Level 3
inputs. Fair value is determined considering the expected payment,
which is discounted to present value. The expected payment is
determined separately in respect of each individual earn-out
agreement taking into consideration the expected level of
profitability of each acquisition.
The significant unobservable inputs are the projections of
future profitability, which have been based on budget and forecast
information for the current year and future periods, and the
discount rate, which has been based on the incremental borrowing
rate. A significant amount of the contingent consideration payable
is included within current liabilities and has therefore not been
discounted. A reasonable change in the discount rate applied would
not have a material impact on the balances recognised within
non-current liabilities.
The following table presents a reconciliation of the contingent
consideration liability measured at fair value on a recurring basis
using significant unobservable inputs (level 3).
As at As at
27 29 As at
February February 29 August
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------- ---------------------------- ------------------------------- --------------------------
Fair value at the start of
the period 3,422 7,954 7,954
Exchange differences (12) (175) (184)
Payments made to vendors
(including legal costs) (131) (1,473) (2,513)
Change in fair value (671) (3,027) (1,835)
Fair value at the end of
the period 2,608 3,279 3,422
--------------------------- ---------------------------- ------------------------------- --------------------------
14. Retirement benefit asset
The amounts recognised in the Income Statement are as
follows:
26 weeks 52 weeks
26 weeks ended Ended ended
27 February 29 February 29 August
2021 2020 2020
GBP'000 GBP'000 GBP'000
------------------------------------- --------------------------- -------------------------- ----------------------
Administrative expenses 9 9 13
Net interest on the net defined
benefit asset (74) (70) (139)
Total income (65) (61) (126)
------------------------------------- --------------------------- -------------------------- ----------------------
Net interest on the defined benefit retirement asset is
recognised within interest income.
The amounts recognised in the Balance Sheet are as follows:
As at As at As at
27 29 29 August
February February 2020
2021 2020
GBP'000 GBP'000 GBP'000
----------------------------- ---------------------------- ---------------------------- ---------------------------
Present value of funded
defined benefit obligations (62,685) (67,203) (65,834)
Fair value of scheme assets 70,492 73,846 73,871
----------------------------- ---------------------------- ---------------------------- ---------------------------
Surplus in funded scheme 7,807 6,643 8,037
----------------------------- ---------------------------- ---------------------------- ---------------------------
Actuarial losses of GBP295,000 (2020: GBP1,187,000) have been
reported in the Statement of Comprehensive Income. The surplus has
decreased over the period since 29 August 2020 due to changes in
market conditions contributing to an overall reduction in the
scheme surplus.
The Group's associate's defined benefit pension scheme is closed
to future service accrual and the valuation for this scheme has not
been updated for the half year as any actuarial movements are not
considered to be material.
15. Share capital
Allotted and fully paid ordinary Number Share capital Share premium Total
shares of 2.5p each of shares GBP'000 GBP'000 GBP'000
------------------------------------ ------------ -------------- ---------------------- -------------------
Opening balance as at 30
August 2020 92,465,833 2,312 9,176 11,488
Proceeds from shares issued:
- LTIP 309,823 7 - 7
- Share save scheme 421,744 11 437 448
At 27 February 2021 93,197,400 2,330 9,613 11,943
------------------------------------ ------------ -------------- ---------------------- -------------------
Opening balance at 1 September
2019 91,942,005 2,299 9,165 11,464
Proceeds from shares issued:
- LTIP 513,604 13 - 13
At 29 February 2020 92,455,609 2,312 9,165 11,477
------------------------------------ ------------ -------------- ---------------------- -------------------
309,823 shares were issued in the period to satisfy the share
awards under the LTIP scheme which were exercised in December
2020.
421,744 shares were issued in the period to satisfy the share
awards under the share save scheme with exercise proceeds of
GBP447,611. The related weighted average price of the shares
exercised in the period was GBP1.061 per share. At the period end
the Company holds 50,045 of these shares in treasury.
As announced on 1 April 2021 the Company's issued share capital
had increased to 93,544,724 shares of which 75,955 shares were held
in treasury. The increase in issued share capital was due to the
issue of 347,324 shares under the share save scheme with exercise
proceeds of GBP368,511 and a related weighted average exercise
price of GBP1.061 per share.
16. Cash generated from continuing operations
26 weeks 26 weeks 52 weeks
ended ended ended
27 February 29 February 29 August
2021 2020 2020
GBP'000 GBP'000 GBP'000
----------------------------------------- ------------------------ ------------------------- ----------------------
Profit for the period from continuing
operations 8,460 9,131 10,922
Adjustments for:
Tax 1,714 1,382 1,575
Tax credit in respect of R&D (180) (240) (250)
Depreciation and impairment of property,
plant and equipment 1,960 2,309 4,567
Depreciation and impairment of
right-of-use assets 1,253 1,248 2,462
Depreciation of investment property 3 3 6
Intangible asset amortisation 781 749 1,513
Loss/(profit) on disposal of property,
plant and equipment 103 (51) 265
Profit on disposal of right-of-use
assets - - (37)
Adjustments to contingent consideration (671) (2,147) (937)
Net fair value charge/(credit) on share
based payments 255 (277) (137)
Release of loan provision - - (783)
Other non-cash adjustments (157) (618) (504)
Interest income (135) (178) (313)
Interest expense and borrowing costs 663 935 1,716
Share of results of associate and joint
ventures (2,196) (1,892) (2,633)
IAS 19 income statement charge
(excluding interest):
Administrative expenses 9 9 13
Changes in working capital (excluding
the effects of
acquisitions):
(Increase)/decrease in inventories (2,783) (3,348) 4,811
(Increase)/decrease in receivables (7,872) (4,976) 3,862
Increase/(decrease) in payables 14,749 5,801 (3,479)
Cash generated from continuing
operations 15,956 7,840 22,639
----------------------------------------- ------------------------ ------------------------- ----------------------
17. Related party transactions
The Group's significant related parties are its associate and
joint ventures, as disclosed in the Annual Report and Accounts
2020.
Rent Net management Dividends
Sales Purchases receivable charges receivable Amounts Amounts
to from from (from)/to from owed from owed to
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- -------- --------------- ----------- --------------------- -------------------- ----------------- --------------------
26 weeks to
27 February 2021
Associate 346 (60,865) 10 (69) 368 368 (20,539)
Joint
ventures 373 (229) - 82 - 1,623 (102)
26 weeks
to
29
February
2020
Associate 280 (55,183) 10 (69) 294 214 (24,334)
Joint
ventures 238 (143) - 80 - 1,756 (2)
----------- -------- --------------- ----------- --------------------- -------------------- ----------------- --------------------
18. Alternative performance measures
The Interim Results include 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
----------------------- ----------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation, amortisation,
profit/(loss) on the disposal of non-current assets
and before share of post-tax results of the associate
and joint ventures. 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 EBITDA Earnings before interest, tax, depreciation, amortisation,
profit/(loss) on the disposal of non-current assets,
before 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 6. 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 6. Adjusted results
are presented because if included, these adjusting
items could distort the understanding of the Group's
performance for the period and the comparability
between the periods 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
6. Adjusted results are presented because if included,
these adjusting items could distort the understanding
of the Group's performance for the period and
the comparability between the periods presented.
----------------------- ----------------------------------------------------------
Adjusted earnings Profit attributable to the equity holders of the
per share 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 period. This is reconciled
to basic earnings per share in note 9.
----------------------- ----------------------------------------------------------
Adjusted diluted Profit attributable to the equity holders of the
earnings per share 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 period adjusted for the effects
of any potentially dilutive options. Diluted earnings
per share is shown in note 9.
----------------------- ----------------------------------------------------------
Net debt The net position of the Group's cash at bank and
borrowings. Details of the movement in borrowings
is shown in note 12.
----------------------- ----------------------------------------------------------
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 DKKBKFBKDBQB
(END) Dow Jones Newswires
April 21, 2021 02:00 ET (06:00 GMT)
Carr's (LSE:CARR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Carr's (LSE:CARR)
Historical Stock Chart
From Apr 2023 to Apr 2024
