TIDMJLH

RNS Number : 7273R

John Lewis Of Hungerford PLC

09 November 2021

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

9 November 2021

JOHN LEWIS OF HUNGERFORD PLC

FINAL RESULTS

John Lewis of Hungerford plc ("John Lewis of Hungerford" or the "Company"), the specialist kitchen manufacturer and retailer, announces its final results for the year ended 30 June 2021.

Chief Executive's Business Review

We are pleased to provide a review of our FY21 financial year to 30 June 2021. As the prior year was significantly impacted by the Covid-19 pandemic, we have also provided data from FY19 in order to provide our shareholders with a more meaningful comparative.

Overview

As reported within our trading update released on 12 August 2021, we are pleased to report that the second half trading recovered our first half losses in full, resulting in a full year profit before tax of GBP80k (2020: Loss GBP885k; 2019: Loss GBP220k). After an immensely disruptive year, with showroom closures for 18 weeks, we are particularly pleased with the efforts of the teams within the Company which resulted in us delivering a profitable year.

The year finished with a positive gross cash position of GBP1,302k. The Company has total loans of GBP1,137k, of which GBP1,079k is secured on its freehold properties. Net cash, excluding IFRS 16 lease liabilities, was therefore GBP165k (2020: net debt GBP708k; 2019: net debt GBP314k). The Company was grateful for the UK Government support received during the year, including the deferral and re-phasing of payments for VAT and PAYE. The re-phased payments were all met within the timescales agreed with HM Revenue and Customs, and by year end GBP78k remained outstanding, which is scheduled for full repayment by February 2022 The Company is pleased to have improved from a net debt of GBP708k to a positive net cash position after loans of GBP165k in the financial year, a positive improvement of GBP872k, with EBITDA (pre IFRS 16) of GBP424k (2020: -GBP388k). Customer deposits at the year-end were GBP363k higher than last year, reflecting the strength of the order book at the year-end.

In February 2021, all the Directors and a PDMR (Person Discharging Managerial Responsibilities) all wished to acquire shares in the Company, and this was effected by a subscription for new shares, which increased cash in the Company by GBP49k.

The table below illustrates the performance against the Covid-19 impacted FY20 year and also the non-Covid-19 disrupted FY19 year. It is pleasing to note that with revenue 5% down on FY19, the gross margin is broadly in line, demonstrating the management's focus on cost control to ensure resilience in our operating model, during a period of supplier price increases, throughout this challenging period.

Financial Summary

 
 
                                FY21     FY20    Change    FY19    Change 
 
 Revenue (GBP'000)              7,877    5,553    41.9%    8,306    -5.2% 
 Gross Profit (GBP'000)         3,712    2,549    45.6%    3,933    -5.6% 
 Gross Margin                   47.1%    45.9%     1.2%    47.4%    -0.3% 
 
 Profit before tax (GBP'000)       81    (885)      966    (220)      301 
 Tax (GBP'000)                    124       94       30     (69)      193 
 Net Profit / (loss) 
  for year (GBP'000)              205    (791)      996    (289)      494 
 
 Net Cash / (debt) (GBP'000)      165    (708)      873    (314)      479 
 
 Earnings per share 
  (p)                            0.11   (0.42)     0.53   (0.15)     0.26 
                               ------  -------  -------  -------  ------- 
 
 

Marketing

Core to the performance in the year under review has been our ability to adapt to changing consumer behaviours, instigated by the closure of our showrooms for 18 weeks of the year and by moving our business operations back online, as required. The excellent work to produce virtual showrooms very promptly after the initial lockdown in March 2020 and ensure consistency in our marketing throughout the pandemic, has ensured that the brand has remained strong and visible throughout. The Company has seen a discernible shift in its following across social media platforms, through the Company's digital development strategy. With a new SEO partner from the start of FY21, several high-profile collaborations and a data driven approach to our digital campaigns, we continue to generate record levels of interest, driven in part by gains in market share and also from the 'pent up' demand arising from the first, long lockdown, when focus on improving the home became a customer priority. Our online activity has demonstrated the strength in our marketing and allowed us to attract customers through our digital channels and drive footfall to our showrooms when they re-opened. This has ensured the showroom estate is consistently busy in all locations, with high levels of quoted design activity, which will continue to be recognised in FY22.

We have mentioned previously the increase in demand within the home improvements sector, with many home related companies experiencing an uplift in enquiries; the demand has been significantly higher than in recent years. Shortages of skilled labour within the industry and the trades people required to install new kitchen and bedroom units, together with the more general shortage of skilled labour within the construction sector, has impacted lead times for many companies. We have been fortunate to retain a highly skilled team in all areas of our business and our lead times remain competitive, and therefore attractive, for customers looking at luxury, painted kitchens and bedrooms. The ongoing recruitment of key personnel in all areas of the business remains a priority for the Company.

Kitchens sold in the year exceeded our recent performance, with a reduction in our bedrooms activity in the year, primarily due to a shift in consumer priorities for their living spaces. We have seen the bedrooms area of the business returning to levels achieved previously, in the current financial year.

Operations

The integrated retail model developed throughout FY20 has proven effective over FY21. Promoting an 'appointment only' approach to our design consultations has improved the effectiveness of our design team, together with enhancing the customer experience in-store. Virtual consultations are still offered to customers unable to visit a showroom and these continue to be popular, supported by our advances in the use of our virtual showrooms and screen sharing technology.

We took the decision to close our central Oxford Showroom during the year, on expiry of the lease. This has given us the opportunity to utilise the space within our head office showroom in South Oxfordshire, to showcase both our kitchens and our bedrooms offering. Customers will benefit from a visit to our production facility, once restrictions ease, which we anticipate being a popular and important element of our customer experience.

The use of our new finance offering for customers, provided by Hitachi Capital UK, has been very well received, with almost GBP900k of sales secured in FY21, using the facility. This exceeded our ambitions and has become a significant component in our customer journey. We look forward to a continued partnership with Hitachi Capital UK, who have been impressed with our exceptional customer satisfaction scores.

Our systems improvements continue to take priority to ensure we are able to support our teams to operate as efficiently as possible. The implementation of the CRM system was the first step in our programme of improvements and we look forward to building our IT framework to manage our growth over the coming years.

Our development team also worked effectively to ensure the timely launch of our new Beaded Shaker range of door style, which has been well received by customers.

There have been widely reported disruption to supply chains nationally over the last 18 months. The industry has experienced significant delays across all bought-in items, together with raw materials. Price increases have been seen in all areas, at an unprecedented level. The operational team have had a challenging year, requiring close management of the supply chain to ensure continuity of supply and the successful fulfilment of customer orders.

In view of these many challenges, we are pleased to report a gross margin broadly in line with the non-Covid-19 disrupted FY19 year, with a 5% reduction of revenue.

 
                      12 months   12 months   12 months 
                        to June     to June     to June 
                           2021        2020        2019 
   ----------------  ----------  ----------  ---------- 
                         GBP000      GBP000      GBP000 
 Total Sales              7,877       5,553       8,306 
 Cost of sales            4,165       3,004       4,373 
------------------- 
 Gross margin             3,712       2,549       3,933 
===================  ==========  ==========  ========== 
 Gross Margin %           47.1%       45.9%       47.4% 
 

Investments in key supporting roles within the Company have been made as we progress throughout the current financial year, given the increased levels of consumer demand.

We continue to work closely with all of our partners to ensure the continued safety of our employees, our customers and our suppliers. We have ensured an ongoing focus on the health, safety and wellbeing of our people.

Trading Outlook

As stated in our trading update released on 12 August 2021, the Company entered the new financial year with an order book substantially larger than in recent years. The level of orders secured in the first 18 weeks of the year has remained high. Despatched sales, forward committed orders and future orders against which a first stage deposit has been taken, stood at GBP7.4m (2020: GBP4.9m; 2019: GBP4.4m), which is significantly ahead of the previous two year comparatives.

The unprecedented business climate throughout the reported period has been challenging and the response of all of our stakeholders has been instrumental in the results we report today. The efforts of all those within the Company together with our relationships with our partners and suppliers, all of whom have been exceptionally supportive, give the Board confidence in the Company's future performance.

Our employees have been outstanding in their commitment to provide a high quality service to our customers and driving value for our shareholders, and thereby ensuring the resilience of the Company, throughout this turbulent period.

On behalf of the Board, I thank them all for their dedication throughout the year as we look forward to a period of growth and a return to sustained profitability, as we enter 2022, during which the Company will celebrate its 50th Birthday.

Kiran Noonan

Chief Executive Officer

8 November 2021

Enquiries:

John Lewis of Hungerford plc 01235 774300

Kiran Noonan - Chief Executive Officer / Acting Chairman

Allenby Capital Limited (Nominated Adviser and Broker) 020 3328 5656

David Worlidge / Nick Naylor / George Payne (Corporate Finance)

Matt Butlin (Sales and Corporate Broking)

 
 Income Statement for the year ended 30 June 
  2021 
 
 
                                                     2021          2020 
 
                                      Notes           GBP           GBP 
 
                                      1, 2, 
 Revenue                               3        7,877,130     5,552,564 
 
 Cost of sales                                (4,165,462)   (3,003,810) 
                                             ------------  ------------ 
 
 Gross profit                                   3,711,668     2,548,754 
 
 Selling and distribution 
  costs                                         (408,863)     (413,375) 
 
 Administrative expenses              4       (3,160,325)   (3,080,877) 
 Other operating 
  income                              4           165,012       210,000 
                                             ------------  ------------ 
 
 Total                                        (2,995,313)   (2,870,877) 
 
 
 Profit/(loss) from operations        4           307,492     (735,498) 
 
 
 Finance income                       7               297           336 
 
 Finance expenses                     8         (227,255)     (150,654) 
                                             ------------  ------------ 
 
 Profit/(loss) before tax                          80,534     (885,816) 
 
 
 Tax Credit                           9           124,549        94,592 
                                             ------------  ------------ 
 
 
 Profit/(loss) for the year                       205,083     (791,224) 
                                             ============  ============ 
 
 Earnings / (Loss) per share          10 
 Basic                                              0.11p       (0.42)p 
 Fully diluted                                      0.10p       (0.42)p 
 
 
 
 Statement of Financial Position as at 30 June 
  2021 
                                                         30 June        30 June 
                                                            2021           2020 
 
                                        Notes                GBP            GBP 
 
 Non-current assets 
 Intangible assets                      11               140,470        157,190 
 Property, plant and 
  equipment                             12             2,629,053      2,790,875 
 Right of use assets                    13             1,372,434      1,444,476 
 Trade and other receivables            16                31,500         42,750 
                                                ----------------  ------------- 
                                                       4,173,457      4,435,291 
 Current assets 
 Inventories                            15               193,133        152,530 
 Trade and other receivables            16               868,878        542,526 
 Deferred tax asset                     19                82,000              - 
 Cash and cash equivalents                             1,301,612        558,765 
                                                ----------------  ------------- 
                                                       2,445,623      1,253,821 
 
 Total assets                                          6,619,080      5,689,112 
                                                ----------------  ------------- 
 
 Current liabilities 
 Trade and other payables               17           (2,052,345)    (1,454,231) 
 Customer deposits                                     (944,000)      (581,058) 
 Lease liabilities                      14             (264,168)      (242,253) 
 Provisions                             20              (29,998)       (60,998) 
 Borrowings                             18                     -      (111,701) 
                                                ----------------  ------------- 
                                                     (3,290,511)    (2,450,241) 
 
 Non-current liabilities 
 Borrowings                             18           (1,137,146)    (1,156,033) 
 Lease liabilities                      14           (1,335,874)    (1,432,063) 
 Provisions                             20              (52,632)       (56,055) 
                                                ----------------  ------------- 
                                                     (2,525,652)    (2,644,151) 
 
 Total liabilities                                   (5,816,163)    (5,094,392) 
                                                ----------------  ------------- 
 
 Net assets                                              802,917        594,720 
                                                ================  ============= 
 
 Equity 
 Share Capital                          23               193,945        186,745 
 Share Premium                                         1,222,433      1,188,021 
 Other Reserves                                            1,421          1,421 
 Revaluation reserve                                     518,357        560,906 
 Retained Earnings                                   (1,133,239)    (1,342,373) 
                                                ----------------  ------------- 
 
 
 Total equity                                            802,917        594,720 
                                                ================  ============= 
 
 The financial statements were approved by the Board of Directors 
  and authorised for issue on 8 November 2021 and were signed on 
  its behalf by: 
 Kiran Noonan                                    Stephen Huggett 
 Director                                        Director 
 
 
 Statement of Cash Flows for the year ended 30 June 2021 
 
 
                                                            2021        2020 
 
                                                             GBP         GBP 
 Cash flows from operating activities 
 Profit/(loss) from 
  operations after tax                                   432,041   (640,906) 
 Amortisation of intangible 
  assets                                                  32,970      32,839 
 Depreciation and impairment 
  of property, plant 
  and equipment                                          188,403     219,769 
 Depreciation of right 
  of use assets                                          256,990     313,625 
 Share based payments                                      4,051       4,965 
 Loss/(profit) on disposal 
  of property, plant 
  and equipment                                            3,237     (1,237) 
 (Increase) in inventories                              (40,603)     (8,508) 
 (Increase)/decrease 
  in receivables                                       (315,102)     157,088 
 Increase/(decrease) 
  in payables                                            598,114    (96,114) 
 Increase in Customer 
  Deposits                                               362,942     211,806 
 (Decrease)/increase 
  in provisions                                         (34,423)      12,000 
                                                      ----------  ---------- 
 Cash generated from operations                        1,488,620     205,327 
 Tax (Credit) on Operations                            (124,549)    (94,592) 
 Net cash from operating activities                    1,364,071     110,735 
                                                      ----------  ---------- 
 
 Cash flows from investing activities 
 Purchase of intangible 
  assets                                                (16,250)    (10,737) 
 Purchase of property, 
  plant and equipment                                   (27,317)    (27,538) 
 Net proceeds from 
  sale of property, 
  plant and equipment                                    (2,487)      10,480 
 Interest received                                           297         336 
 Net cash used in investing 
  activities                                            (45,757)    (27,459) 
                                                      ----------  ---------- 
 
 Cash flows from financing activities 
 Interest 
 paid                                                  (125,970)   (150,654) 
 Increase in borrowings                                        -   1,079,000 
 Allotment 
  of shares                                               41,608           - 
 Repayment of borrowings - finance leases               (18,887)    (32,483) 
 Repayment of borrowings - bank loans                  (111,701)   (380,106) 
 Repayment of IFRS 16 lease liabilities                (360,517)   (327,455) 
 Net cash used in financing activities                 (575,467)     188,302 
                                                      ----------  ---------- 
 
 
 Net increase in cash 
  and cash equivalents                                   742,847     271,578 
                                                      ----------  ---------- 
 Net cash and cash 
  equivalents at the 
  start of the period                                    558,765     287,187 
 Net cash and cash 
  equivalents at the 
  end of the year                                      1,301,612     558,765 
                                                      ==========  ========== 
 
 
 Net cash and cash 
  equivalents comprise: 
 Cash at bank and in 
  hand                                                 1,301,612     558,765 
 Bank overdrafts                                               -           - 
                                                       1,301,612     558,765 
                                                      ==========  ========== 
 

Notes:

   1.    GOING CONCERN 

The financial statements are prepared on a going concern basis, which the directors believe to be appropriate for the following reasons:

The results show that the Company made a profit after tax during the year of GBP204k (2020: loss after tax of

GBP791k) and had net current liabilities of GBP844k (2020: GBP1,196k) as at 30 June 2021.

The year finished with a positive gross cash position of GBP1,302k (2020: GBP559k). The Company has total loans of GBP1,137k (2020: GBP1,268k) of which GBP1,079k (2020: GBP1,192k) is secured on its freehold properties, and net cash excluding IFRS 16 lease liabilities was therefore GBP165k (2020: net debt GBP708k; 2019: net debt

GBP314k). The Company is pleased to have improved from a net debt of GBP708k to a positive net cash position after loans of GBP165k in the financial year, an improvement of +GBP872k, with EBITDA (pre IFRS 16) of GBP424k (2020: -GBP388k). Customer deposits of GBP944k (2020: GBP581k) are GBP363k higher than last year, reflecting the strength of the order book at year end.

The Company owns the Freehold of its Head Office and Factory in Wantage and its Showroom in Hungerford, which were revalued in February 2020 and have a Net Book Value of GBP1,872k (2020:

GBP1,896k) as at 30 June 2021. The total Net Assets at 30 June 2021 were GBP803k (2020: GBP595k). The Directors have had preliminary contact with lenders to re-finance the loan, based on our return to profitability, asset backing and stronger cash generation. It is the intention of the Directors to refinance the loan at the earliest opportunity.

The Trading Outlook within the Chief Executive's Business Review shows that the level of orders secured in the first 18 weeks of the year has remained high. Despatched sales, forward committed orders and future orders against which a first stage deposit has been taken, stood at GBP7.4m (2020: GBP4.9m; 2019: GBP4.4m), which is significantly ahead of the corresponding periods in both prior years FY20 and the non-disrupted FY19, which leads the Directors to believe that there is now sustained levels of consumer interest in home improvements.

The Company has successfully developed a hybrid working model allowing the business to work effectively during normal trading conditions and during lockdowns, when the showrooms have been closed. This transition to digital working practices, further gives the Directors the confidence that the Company can now withstand any disruption that may arise from the ongoing pandemic.

The Directors have developed a carefully considered Plan for FY22, structured through the use of individual building blocks, supported by substantive rationale. Cash flows have been prepared for a reasonably foreseeable period of at least twelve months from the date of signing of these financial statements.

For additional prudence, the Directors have modelled a sensitivity analysis up to a 15% reduction in sales against this Plan and for a period of twelve months from the date of signing, to be assured that the Company can withstand any potential periods of lockdown or other business impacts related to the ongoing pandemic.

As the Company operates a made-to-order, negative working capital model, it is reliant on the cash flows from customer deposits and completion of sales to be able to meet its liabilities as they fall due. The Directors have considered all of the factors noted above, including the strength in the Company's current trading and forward order book, together with the high levels of quoted business, the support of its landlords and suppliers, plus, the government support available. Taking these factors into account, balanced with the inherent uncertainty associated with forecasting the impact of the Covid-19 pandemic, the Directors are confident that the Company has adequate resources to continue to meet all liabilities, as and when they fall due, for the reasonably foreseeable future and, at least for the period of twelve months from the date of approval of these financial statements.

 
 2. PROFIT/(LOSS) FROM OPERATIONS 
 
                                                   2021        2020 
 
                                                    GBP         GBP 
 Profit/(loss) from operations is stated after 
  charging: 
 
 Auditors remuneration - Company 
  audit                                          26,900      18,500 
 Auditors remuneration - taxation 
  services                                        3,600       3,500 
 Amortisation of intangible fixed 
  assets                                         32,970      32,839 
 Depreciation of owned property 
  plant and equipment                           175,959     196,259 
 Depreciation of plant and equipment 
  held 
  on finance leases                              12,444      18,043 
 Depreciation of Right of Use Assets            256,990     313,625 
 Government Grant - CJRS 
 - Direct Factory Labour                       (20,571)    (26,373) 
 - Other 
 Salaries                                      (62,564)    (56,819) 
 Other Operating Income - 'Government 
  Grant for Retail Businesses'                (165,012)   (210,000) 
 Profit / (Loss) on disposal of 
  property, plant and equipment                   3,237     (1,237) 
 Operating lease rentals 
 - Plant and 
  machinery                                      11,610      11,610 
 Cost of inventories recognised 
  as an expense                               2,806,385   1,976,981 
 
 
 
 
 3. TAX ON PROFIT / (LOSS) FROM OPERATIONS 
                                                              2021        2020 
 
                                                               GBP         GBP 
 
 Current period taxation 
 
 UK Corporation tax charge for the period                        -           - 
 Research and development tax credit                             -           - 
                                                        ----------  ---------- 
 
 Total current 
 tax                                                             -           - 
 Origination and reversal of temporary timing 
  differences                                                    -     229,886 
 Current year deferred tax asset recognised 
  / (not recognised)                                             -   (229,886) 
 Reversal of previously recognised Deferred 
  Tax asset                                                 82,000           - 
 Deferred tax credit on losses                                   -     131,571 
 Adjustment in respect of previous years 
  Research and Development tax credit                            -    (36,979) 
 Changes in tax rates being 6% impact on                    42,549           - 
  the deferred tax asset/liabilities recognised 
  on losses/revaluations in prior year 
                                                           124,549      94,592 
                                                        ==========  ========== 
 
 
 The tax assessed for the period differs from the standard rate 
  of corporation tax in the UK. The differences are explained 
  below: 
 
                                                              2021        2020 
 
                                                               GBP         GBP 
 Profit/(loss) on ordinary activities before 
  tax                                                       80,534   (885,816) 
                                                        ----------  ---------- 
 
 Profit/(loss) on ordinary activities multiplied 
  by standard rate of corporation tax in 
  the UK of 
  19%                                                       15,301   (168,305) 
 Effect of: 
 Expenses not deductible for tax purposes                        -       1,425 
 Depreciation on assets not qualifying for 
  tax allowances                                             2,197       4,498 
 Other permanent differences                                32,992     (7,547) 
 Adjustment in respect of previous years 
  Research and Development tax credit                            -    (36,979) 
 Prior year adjustment on IFRS16 adoption                        -    (47,934) 
 Effect of change in local corporation tax 
  rate                                                   (104,867)    (12,023) 
 Deferred tax asset not recognised                        (27,623)     229,886 
 Deferred tax credit on losses                                   -     131,571 
 Change of tax rate for DT Asset on Revaluation           (42,549)           - 
  reserve recognised in OCI 
 
 Total tax credit / (charge) in income statement           124,549      94,592 
                                                        ==========  ========== 
 
 On 3rd March 2021, the Chancellor of the Exchequer announced 
  an increase in rate of Corporation tax to 25% to take effect 
  from 1st April 2023 for companies whose profits are greater 
  than GBP250,000 per annum. 
 
 
 4. EARNINGS PER SHARE 
 
 
                                                                                    2021              2020 
 
 Earnings/(loss) per ordinary share is 
  calculated as 
 follows: 
 
 Basic 
 Profit/(loss) attributable to 
  ordinary shareholders (GBP)                                                    205,083         (791,224) 
 Weighted average number of ordinary 
 shares in issue                                                             189,388,807       186,745,519 
 Earnings/(loss) per ordinary 
  share                                                                           0.11 p           (0.42)p 
                                                                            ------------      ------------ 
 
 Fully diluted 
 Profit/(loss) attributable to 
  ordinary shareholders (GBP)                                                    205,083         (791,224) 
 Weighted average number of ordinary 
 shares in issue                                                             189,388,807       186,745,519 
 Weighted average number of ordinary 
 shares under option                                                          17,478,866         4,369,961 
 Earnings/(loss) per ordinary 
  share                                                                           0.10 p           (0.42)p 
                                                                            ============      ============ 
 
 
 Basic earnings per share amounts are calculated by dividing 
  the profit / (loss) for the year attributable to ordinary 
  equity holders of the Company by the weighted average 
  number of Ordinary shares outstanding during the year. 
 
  Diluted earnings per share is calculated by dividing 
  the profit / (loss) attributable to ordinary equity holders 
  of the Company by the weighted average number of Ordinary 
  shares outstanding during the year plus the weighted 
  average number of Ordinary shares that would have been 
  issued on the conversion of all dilutive potential Ordinary 
  shares into Ordinary shares. 
 
   5. BORROWINGS 
 
                                                                                    2021                2020 
                                                                                     GBP                 GBP 
 
 Loans                                                                         1,079,000           1,190,701 
 Finance lease liabilities                                                        58,146              77,033 
                                                                            ------------      -------------- 
                                                                               1,137,146           1,267,734 
                                                                            ============      ============== 
 
 Presented in the balance sheet as: 
 Lease liabilities - current                                                     264,168             242,253 
 Borrowings - current                                                                  -             111,701 
 Borrowings - non-current                                                      1,137,146           1,156,033 
                                                                            ------------      -------------- 
                                                                               1,401,314           1,509,987 
                                                                            ============      ============== 
 
 (a) Bank & other borrowings 
 Analysis of bank loan repayments: 
 In one year or less                                                                   -             111,701 
 In more than one year but 
  not 
 more than two years                                                                   -                   - 
 In more than two years but 
  not 
 more than five years                                                                  -                   - 
 In more than five years                                                       1,079,000           1,079,000 
                                                                               1,079,000           1,190,701 
                                                                            ============      ============== 
 
 

The loan is secured by a legal charge over the Company's freehold properties at Park Street, Hungerford, Berkshire and Grove Business Park, Downsview Road, Wantage, Oxfordshire. The interest only loan facility has an interest rate of 10.55% above base rate with a minimum rate of 10.8% per annum, payable monthly on drawn down funds. In case of default, an additional 7.2% interest would be payable under the loan.

In the previous year the company had one bank loan secured by a legal charge over the Company's freehold properties at Park Street, Hungerford, Berkshire and Grove Business Park, Downsview Road, Wantage, Oxfordshire. One of these loans was still outstanding at the previous year end and was repaid on 1st July 2020.

The loan was repayable over 15 years from 22 March 2010 and carried interest at a fixed rate of 7.55% per annum for a period of 10 years and thereafter at a floating rate linked to the Bank of England base rate. The second loan has a value of GBP0, (2020: GBP111,701) denominated in Sterling.

 
                                                   2021       2020 
                                                    GBP        GBP 
 (b) Finance lease liabilities 
 Gross nance lease liabilities 
  - 
  minimum lease payments: 
 In one year or 
 less                                            21,385     26,484 
 Between one and five 
  years                                          36,761     66,212 
 More than five years                                 -          - 
                                                 58,146     92,696 
                                              ---------  --------- 
 Future finance charges on finance 
  lease liabilities                             (8,065)   (15,663) 
 Present value of finance lease 
  liabilities                                    50,081     77,033 
                                              =========  ========= 
 
 Future finance charges on finance lease liabilities are 
  analysed as follows: 
                                                   2021       2020 
                                                    GBP        GBP 
 In one year or less                            (5,099)    (7,597) 
 Between one and five 
  years                                         (2,966)    (8,066) 
                                                (8,065)   (15,663) 
                                              =========  ========= 
 

Finance lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

 
 6. PROVISIONS 
 
                                     Warranty   Dilapidations      Total 
                                    provision       provision 
                                                          GBP        GBP 
 At 1 July 2019                        45,575          59,478    105,053 
 Arising during the year               48,782               -     48,782 
 Utilised during the year            (36,782)               -   (36,782) 
 At 30 June 2020                       57,575          59,478    117,053 
                                  -----------  --------------  --------- 
 Arising during the period                  -               -          - 
 Utilised during the period          (31,000)         (3,423)   (34,423) 
 At 30 June 2021                       26,575          56,055     82,630 
                                  ===========  ==============  ========= 
 
                                                         2021       2020 
                                                          GBP        GBP 
 Current                                               29,998     60,998 
 Non-Current                                           52,632     56,055 
                                                       82,630    117,053 
                                               ==============  ========= 
 
 

Warranty Provision

The Company makes provision for potential future warranty claims on kitchens & bedrooms sold. This provision is reviewed and adjusted annually based on the levels of turnover achieved and the claims recorded in the same period.

Dilapidations Provision

The Company makes such provision for dilapidations relating to its leasehold showroom estate as it considers necessary based on the length of the remaining term for each showroom & the future plans for each showroom. Based on this, experience of exiting previous showrooms and industry averages, Management have estimated that a provision of GBP5 per square foot will give a reasonable estimate of any futures costs. On exit from a showroom, once the costs have been finalised and the showroom exited, the provision would be released.

 
 7. SHARE BASED PAYMENTS 
 
                                                                  2021                       2020 
 
                                                                   GBP                        GBP 
 Share based payments 
  expense                                                        4,051                      4,965 
                                                           -----------  -----------  ------------ 
 
 The charge relates entirely to equity-settled share based 
  payment transactions. 
 
 On 25 March 2019 the Company granted options over 26,215,931 
  ordinary shares of 0.1 pence each in the Company ("Ordinary 
  Shares") at an exercise price of 1 pence per Ordinary 
  Share to all employees and Directors of the Company under 
  the Company's Unapproved and EMI Share Option Plan ("Option 
  Plan"). 
 
  Performance conditions apply to the vesting of options 
  under the Option Plan that are linked to the Company's 
  future profit and share price performance. In addition, 
  the Option Plan includes a hurdle criteria which stipulates 
  that no Ordinary Shares under the share price performance 
  criteria will vest until the share price of an Ordinary 
  Share reaches 3 pence. 
 
 
 
  The Option Plan was approved by shareholders at the 2018 
  Annual General Meeting and the principal terms of the 
  Option Plan were summarised in Appendix 1 to the 2018 
  Notice of AGM available on the Company's website www.john-lewis.co.uk. 
 The Option Plan was approved by shareholders at the Company's 
  Annual General Meeting on 11 December 2018 . The Company 
  has calculated charges for the share option awards using 
  Monte Carlo and Binomial models. Volatility and risk free 
  rates have been calculated for each share option award 
  based on expected volatility over the vesting period and 
  current risk free rates at the time of each award. Volatility 
  assumptions are based on historic volatility for the Company's 
  share price over 4 years. Assumptions for future profitability 
  have been based on management estimates. 
 The performance conditions attached to the share options 
  are as follows: 
 
               AIM listed share price (per                         Percentage of the Award 
                      Ordinary Share)                                    which vests 
                                                           -------------------------------------- 
                        > GBP0.03                                          9.375% 
                        > GBP0.04                                          9.375% 
                        > GBP0.05                                          9.375% 
                        > GBP0.06                                          9.375% 
                        > GBP0.07                                          9.375% 
                        > GBP0.08                                          9.375% 
                        > GBP0.09                                          9.375% 
                        > GBP0.10                                          9.375% 
---------------------------------------------------------  -------------------------------------- 
 
 If the AIM listed share price has reached GBP0.03 or higher 
------------------------------------------------------------------------------------------------- 
            Profit before Tax (in any 12-month                     Percentage of the Award 
               statutory accounting period)                              which vests 
---------------------------------------------------------  -------------------------------------- 
                        > GBP200k                                           5.00% 
                        > GBP400k                                           5.00% 
                        > GBP500k                                           5.00% 
                        > GBP600k                                           5.00% 
                        > GBP700k                                           5.00% 
---------------------------------------------------------  -------------------------------------- 
 
 Assumptions used in the valuation of share option awards 
  during the year were as follows: 
 
                     Share price                                                            IFRS2 
                         at date                                                       fair value 
                        of award                     Risk                    Option     per share 
    Award             / exercise      Expected       free     Expected      life in        option 
     date          price (pence)    volatility       rate    dividends        years       (pence) 
 
 25 March            0.6 /                                                                  0.125 
  2019                 1.0                 50%      1.02%            -           10       - 0.229 
 
 
 Share and share option awards outstanding 
 The share options awarded during the year under the Option 
  Plan were as follows: 
      Scheme           Exercise        B / Fwd     Number       Number       Number       C / Fwd 
    and date              price         1 July    granted    forfeited    exercised       30 June 
    of award                              2020                                               2021 
              -----------------  -------------  ---------  -----------  ----------- 
 
 Option 
  Plan 
  25 March 
  2019 
  Vesting 
  date is 
  variable 
  but no 
  less then            1 
  2 years             pence         17,479,844          -      356,972            -    17,122,872 
-------------  -----------------  ------------  ---------  -----------  -----------  ------------ 
 
 The weighted average remaining contractual life of outstanding 
  share options is 7.5 years. The number of exercisable 
  share options at 30 June 2021 was Nil (2020: Nil). 
 

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 FSEEEAEFSEIF

(END) Dow Jones Newswires

November 09, 2021 02:00 ET (07:00 GMT)

John Lewis Of Hungerford (LSE:JLH)
Historical Stock Chart
From Oct 2022 to Nov 2022 Click Here for more John Lewis Of Hungerford Charts.
John Lewis Of Hungerford (LSE:JLH)
Historical Stock Chart
From Nov 2021 to Nov 2022 Click Here for more John Lewis Of Hungerford Charts.