Final Results
25 May 2022
Likewise Group plc
("Likewise" or the "Group")
Audited Final Results for the year ended 31 December 2021
28% sales growth and profitability established
Likewise Group plc (AIM:LIKE), the fast growing UK floor coverings distributor, announces its audited Final Results for the year ended 31 December 2021 ("FY21" or the "Period").
FY21 Summary Highlights
· Sales increased 28% to £60.5 million (FY20: £47.3 million)
·
Gross profit margin improved to 30.0% (FY20: 26.1%)
·
Profitability established with underlying profit before tax of £1.6 million (FY20: Loss before tax of £1.5 million)
·
Maiden dividend of 0.2 pence per ordinary share declared and Board committed to a progressive policy
·
Net assets increased to £22.4 million (FY20: £11.6 million) and have since grown to £38.7 million as at 30 April 2022 post the acquisitions of Valley Wholesale Carpets and Delta Carpets
· Gross cash increased to £8.4 million as at 31 December 2021
·
Positive operational and trading performance in 2022 to date
·
Distribution capability increased to c.15 million cubic feet (FY20: c.8 million cubic feet)
·
Extensive Sales and Marketing initiatives
· Two acquisitions totalling £33.0 million gross completed post year end in addition to Organic Growth delivered in FY21
· The Board remains open to share buyback programmes subject to market conditions and alternative opportunities
Chairman and Chief Executive Statement
Likewise is very pleased to announce it has delivered its first profit in the year ended 31 December 2021 following the initial 3 years of investment to establish a meaningful floor covering distribution business in the UK.
Sales increased 28% from £47.3 million to £60.5 million which combined with Gross Margin improving from 26.1% to 30.0%, due to improved product and customer mix, has generated an Underlying Profit Before Tax of £1.6 million (2020: Loss of £1.5 million).
During the last eighteen months Likewise has made significant progress including developing a Profitable Business, successfully floating on AIM during August 2021 and the important strategic acquisition of Valley Wholesale Carpets (2004) Limited ("Valley") in January 2022. Likewise also acquired Delta Carpets (Holdings) Limited ("Delta") in April 2022.
In addition to the increasing profitability, Likewise's Balance Sheet continues to strengthen with a significant Freehold Property Portfolio of c.£20 million and Net Cash of £3.0 million (Gross Cash £8.4 million) as at 31 December 2021. Net Assets as at 31 December 2021 were £22.4 million, increasing to £38.7 million at 30 April 2022 post the acquisition of Valley and Delta.
With the support of Suppliers and Customers, the Management, Sales Representatives and Staff of Likewise have now established a Trade Brand in most geographical areas of the UK with plans to further expand into the South and South West of England plus South Wales.
Significant Point of Sale and Sampling have been introduced in 2021 with an accelerated number of product launches and additional market presence planned during Q2 and Q3 2022.
A Business to Business website has been launched to allow Trade Customers to access stock and place orders at any time.
The acquisition of Valley also significantly propelled Likewise forward. Valley will remain an autonomous business and is trading in line with management expectations.
The economic impacts of COVID-19 and now the horrific war in Ukraine has increased cost prices, particularly due to energy, raw materials and incoming freight costs. During the period we have implemented a number of selling price increases, the most recent on 1 May 2022.
Sales and Marketing activities are supported by the Group's investment in the Distribution infrastructure and material handling capacity. This includes the new Distribution Centre in Glasgow, due to be operational in Q1 2023, the recent move to an enlarged facility in Newcastle and the Birmingham Distribution Hub becoming operational which will also release capacity in the Leeds Distribution Hub. The Newbury Logistics Centre is now operational to service the South of England.
Within Valley, work has commenced to extend the Freehold Distribution Centre in Derby which will provide more storage capability in addition to increased cutting capacity for Carpet and Residential Vinyl. Furthermore the currently unutilised Freehold Distribution Centre in Newport, South Wales will commence trading in Q3 2022.
Delta, acquired in April 2022, originally based in Leeds has now been relocated to the Likewise Distribution Hub in Leeds and is now fully operational through the Likewise Logistics Network including the Distribution Hub in Birmingham.
With the Distribution capacity established to date, combined with the enhancements to become operational during the remainder of 2022, the Group has sufficient storage and processing capacity to exceed its medium-term aspirations.
Dividend and Potential Share Buy Back
The Board is committed to a progressive dividend policy and following the positive performance in FY21 is proposing to pay its maiden dividend. As announced on 1 March 2022, the Company completed a share capital reduction to create distributable reserves. Due to insufficient distributable reserves as at 31 December 2021, this maiden dividend will be classified as an interim dividend, but is reflective of the financial performance in 2021. The Company expects to make annual final dividend payments following the approval at future annual general meetings of the Company.
The proposed dividend is 0.2p per ordinary share. The dividend will be paid on 8 July 2022 to shareholders on the register on 6 June 2022. The Company's ordinary shares will become ex-dividend on 1 June 2022.
The Placing and Open Offer at 35 pence to acquire Valley was significantly Over Subscribed. The Board decided to accept excess funds to satisfy investor demand. Given the current Share Price the Board remain open to share buyback programmes subject to market conditions and alternative value accretive opportunities to deploy Group cash.
Outlook
Likewise continues to increase Sales Revenue and Gross Margin on a like for like basis. With the infrastructure established and further investment in Sales and Marketing, the Board considers that the Group has the Management and Teams in place to out-perform market conditions and increase market share.
Tony Brewer, Chief Executive of Likewise Group plc, said:
"Likewise has achieved a good start to the year with a continuation of the positive sales trend and whilst being aware of inflationary pressures and general consumer sentiment, is currently on target to achieve its objectives for the year.
We would like to thank all of our Suppliers and Customers for their support and our Management and Staff for their huge contribution to the business since 2018 which has seen a massive change from the formative period.
Likewise is extremely optimistic with regards to the Medium and Long Term given the business and strong foundations that have been established to date."
For further information, please contact:
|
Likewise Group plc Tony Brewer, Chief Executive Roy Povey, Chief Financial Officer |
Tel: 0121 817 2900 |
|
Zeus (Nominated Adviser & Joint Broker) Jordan Warburton / David Foreman / James Edis (Investment Banking) Dominic King (Corporate Broking)
|
Tel: 0203 829 5000 |
|
Ravenscroft Consultancy & Listing Services Limited (Joint Broker) Semelia Hamon (Corporate Finance) |
Tel: 01481 732746 |
|
Novella Communications (Financial PR) Claire de Groot / Tim Robertson |
Tel: 0203 151 7008 |
CAUTIONARY STATEMENT
Certain statements included or incorporated by reference within this announcement may constitute "forward-looking statements" in respect of the Group's operations, performance, prospects and/or financial condition. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words and words of similar meaning as "anticipates", "aims", "due", "could", "may", "will", "should", "expects", "believes", "intends", "plans", "potential", "targets", "goal" or "estimates". By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions and actual results or events may differ materially from those expressed or implied by those statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. No responsibility or obligation is accepted to update or revise any forward-looking statement resulting from new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast. This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares or other securities in the Group, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares or other securities of the Group. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. Statements in this announcement reflect the knowledge and information available at the time of its preparation.
STRATEGIC REPORT
Business Overview
Likewise Group Plc is a distributor of floorcoverings and mattings and has the opportunity to become one of the UK's largest distributors in this sector.
Likewise Group Plc intends to utilise the expertise and industry knowledge of the Board, Executive Board and Operational Management to develop an alternative to larger industry competitors. Management believe this can be achieved through a mixture of organic growth, operational leverage and where appropriate, acquisitions.
The Group has continued to grow rapidly and building on its success has continued to expand in 2021 with the addition of a new national distribution hub of 57,000 sq. ft in Birmingham from which the new Likewise Midlands division has been launched.
The Group now operates from the national distribution hubs in Leeds and Birmingham, a national distribution centre in Sudbury, a regional distribution centre in Manchester, three smaller regional logistics centres in Glasgow, Newcastle and Peckham, as well as the operations of H&V BVBA in Belgium.
The Company successfully floated on the Alternative Investment Market (AIM) in August 2021, raising gross proceeds of £10.0m. The listing on AIM provides significant opportunity to fund further investment in organic growth and earnings enhancing acquisitions in the future. So far, these funds have helped facilitate the acquisition of Valley Wholesale Carpets (2004) Limited and Delta Carpets (Holdings) Limited and their respective subsidiaries. The flotation of the business on AIM also enhances the Group's awareness and presents new opportunities for investment from institutional and retail investors alike.
COVID-19
With the impact of the COVID 19 pandemic continuing into 2021, the Group benefitted from strong trading activity in the home improvement sector. The business continued to adapt and successfully navigate the disruption whilst maintaining a high level of service for customers.
The Group benefitted from the ongoing VAT deferral scheme as well as grants available from the Coronavirus Job Retention Scheme (CJRS). All amounts deferred have subsequently been paid by the end of January 2022 in accordance with the payment plans established with HMRC.
Overall, whilst the COVID 19 pandemic presented many challenges in the early stages of 2020, the ability to make significant improvements to IT, logistics and operations of the Group, which would have been more difficult under normal trading conditions, has had a beneficial impact on the Group.
Trading performance
The Directors are pleased to report the Group's revenue increased by 28% from £47.3m in 2020 to £60.5m for the year ended December 2021.
With the ongoing uncertainty of the COVID 19 pandemic, the Group was committed to focusing on developing positive organic growth in all businesses, but particularly that of the new Likewise branded businesses established in 2019. These businesses continue to gain traction in their local markets.
Likewise Midlands was established during 2021, operating from a leasehold distribution centre in Birmingham. This provides further improvement to the Group's UK logistics network whilst also servicing new customers in the region. Significant investment has been undertaken throughout 2021 with the new Midlands facility becoming operational in January 2022. Following the launch of Likewise Midlands in 2021, we expect a meaningful business to develop in 2022. Investment in initial start up costs in the Midlands business amounts to £0.72m in the period (including IFRS 16 impact of new leasehold property undertaken).
A & A in Manchester continues to trade strongly and well exceeded its budgeted performance. A & A has also enlarged its sales territory with the addition of a new sales representative breaking into the Midlands region in H2 2021. A & A is expecting to continue to build this new market throughout 2022.
Likewise Matting, has benefited from increased trading activity from the hospitality sector which was significantly impacted throughout the course of the pandemic in 2020. Revenue increased 13.7% compared to 2020 as a result.
Likewise Floors (formerly Heatseam) continues to benefit from the improvements made to its network following the amalgamation of its two previous sites into one National Distribution Hub in Leeds at the end of 2020. With the new site fully operational at the beginning of 2021, the impact this has had on the Group's logistics capacity and material handling capabilities has been significantly beneficial to the wider Group.
Overall, the trading performance has continued to strengthen following the COVID 19 pandemic, and improvements to the business throughout that time continue to realise benefits for the wider Group.
Business strategy
It is the belief of the Board that value can be generated for shareholders, suppliers and consumers by creating a national supplier and distributor of UK floorcoverings.
As with the acquisition of Valley Wholesale Carpets (2004) Limited and Delta Carpets (Holdings) Limited in 2022, where the Board consider future acquisitions, they will focus around increasing the scale and operational reach of the Group into new regions and consolidate the Group's overall market position.
Market and competition
The floorcovering market is made up of manufacturers, distributors, retailers and installers. It is the strategy of Likewise Group to become a national distributor in this market.
The UK flooring market is worth c.£2 billion split between residential, commercial, public and industrial markets. It is the strategy of the Group to focus on the residential and commercial areas of the market.
Key performance indicators
The Board consider the following as financial key performance indicators (KPIs) for the Group: revenue, operating profit and operating cash flow. The Board members review these for each of the businesses on a monthly basis. Individual subsidiaries have additional key performance indicators specific to their operations. Sales and margin are also monitored against budget on a daily basis by the executive management team.
Key performance indicators were as follows:
|
|
Year ended £
|
Year ended 31 December 2020 £ |
Increase % |
|
Revenue |
60,490,559 |
47,322,673 |
27.8% |
|
Adjusted profit/(loss) before tax |
1,598,390 |
(1,520,263) |
205.1% |
|
Operating cash flow |
(299,973) |
4,990,771 |
(106.0%) |
The above adjusted operating profit/(loss) before tax figure is stated after adding back:
|
|
Year ended 31 December 2021 £
|
Year ended 31 December 2020 £ |
|
Loss from new operations (Likewise Midlands) |
724,474 |
‑ |
|
Amortisation of intangibles |
287,428 |
287,428 |
|
AIM listing costs |
352,142 |
‑ |
|
Share based payments |
149,210 |
68,992 |
|
Acquisition costs |
‑ |
19,645 |
|
Restructuring costs |
98,253 |
821,709 |
|
Impact of IFRS 16 |
213,765 |
339,404 |
|
Loss on revaluation of consideration on acquisition |
‑ |
217,540 |
The following tables show a reconciliation of the adjusted results.
Adjusted results 2021
|
|
Underlying performance (adjusted)
|
IFRS16 impact |
Amort'n of intangible |
Loss from new operations (Likewise Midlands) |
Share related costs |
Restructur-ing costs |
Reported |
|
Revenue |
60,490,559 |
|
|
|
|
|
60,490,559 |
|
Cost of sales |
(42,350,33) |
|
|
|
|
|
(42,350,33) |
|
Gross profit |
18,140,222 |
|
|
|
|
|
18,140,222 |
|
Other operating income |
212,183 |
|
|
|
|
|
212,183 |
|
Admin costs |
(9,554,239) |
31,269 |
(287,428) |
(651,595) |
(501,352) |
(98,253) |
(11,061,5) |
|
Distribution costs |
(7,050,344) |
|
|
|
|
|
(7,050,34) |
|
Impairment losses on trade receivables |
(42,241) |
|
|
|
|
|
(42,241) |
|
Profit/(loss) from operations |
1,705,581 |
31,269 |
(287,428) |
(651,59) |
(501,352) |
(98,253) |
198,222 |
|
Finance income |
173 |
|
|
|
|
|
173 |
|
Finance costs |
(107,364) |
(245,034) |
|
(72,879) |
|
|
(425,277) |
|
Profit/(loss) before tax |
1,598,390 |
(213,765) |
(287,428) |
(724,474) |
(501,352) |
(98,253) |
(226,882) |
|
Taxation |
81,459 |
|
|
|
|
|
81,459 |
|
Profit/(loss) for the year |
1,679,849 |
(213,765) |
(287,428) |
(724,474) |
(501,352) |
(98,253) |
(145,423) |
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
Revaluation of land and buildings |
1,802,257 |
|
|
|
|
|
1,802,257 |
|
Actuarial loss on defined benefit schemes |
(20,000) |
|
|
|
|
|
(20,000) |
|
Deferred tax on revaluation |
(471,901) |
|
|
|
|
|
(471,901) |
|
Items that will or may be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
Exchange losses arising on translation on foreign operations |
(17,222) |
|
|
|
|
|
(17,222) |
|
Total comprehensive income |
2,972,983 |
(213,765) |
(287,428) |
(724,474) |
(501,352) |
(98,253) |
1,147,711 |
Adjusted results 2020
|
|
Underlying performance (adjusted)
|
IFRS16 impact |
Amort'n of intangibles |
Acquis'n costs |
Share related costs |
Restruc‑ turing costs |
Reported |
|
Revenue |
47,322,673 |
|
|
|
|
|
47,322,673 |
|
Cost of sales |
(34,992,37) |
|
|
|
|
|
(34,992,37) |
|
Gross profit |
12,330,303 |
|
|
|
|
|
12,330,303 |
|
Other operating income |
852,448 |
|
|
|
|
|
852,448 |
|
Admin costs |
(8,907,583) |
(218,116) |
(287,428) |
(19,645) |
(68,992) |
(821,709) |
(10,323,473) |
|
Distribution costs |
(5,624,387) |
|
|
|
|
|
(5,624,387) |
|
Impairment losses on trade receivables |
(64,373) |
|
|
|
|
|
(64,373) |
|
Loss from operations |
(1,413,592) |
(218,116) |
(287,428) |
(19,645) |
(68,992) |
(821,709) |
(2,829,482) |
|
Finance income |
10 |
|
|
|
|
|
10 |
|
Finance costs |
(106,681) |
(121,288) |
|
|
|
|
(227,969) |
|
Loss on revaluation of consideration on acquisition |
|
|
|
(217,540) |
|
|
(217,540) |
|
Loss before tax |
(1,520,263) |
(339,404) |
(287,428) |
(237,185) |
(68,992) |
(821,709) |
(3,274,981) |
|
Taxation |
203,677 |
|
|
|
|
|
203,677 |
|
Loss for the year |
(1,316,586) |
(339,404) |
(287,428) |
(237,185) |
(68,992) |
(821,709) |
(3,071,304) |
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
Revaluation of land and buildings |
238,757 |
|
|
|
|
|
238,757 |
|
Actuarial loss on defined benefit schemes |
(20,000) |
|
|
|
|
|
(20,000) |
|
Items that will or may be reclassified to profit or loss: |
|
|
|
|
|
|
|
|
Exchange losses arising on translation of foreign operations |
(39,403) |
|
|
|
|
|
(39,403) |
|
Total comprehensive income |
(1,137,232) |
(339,404) |
(287,428) |
(237,185) |
(68,992) |
(821,709) |
(2,891,950) |
The Board additionally monitors the square footage of available warehouse space as a non‑financial KPI. The warehouse capacity as at 31 December 2021 was 300,000 square feet (2020: 243,000 square feet).
Process for managing risk
The Board continually assesses and monitors the key risks in the business. Below describes the principal risks and uncertainties that could have a material impact on the Group's performance and prospects and the mitigating activities which are aimed at reducing the impact or likelihood of a major risk materialising. The Board does recognise, however, that it will not always be possible to eliminate risk.
Business Disruption
The Group's operations could be subject to disruption due to factors including incidents such as a major fire or failure of key suppliers. Incidents such as a fire at key premises or failure of key suppliers could result in the temporary cessation in activity or disruption of the Group's facilities impeding the Group's ability to deliver its products to its customers, adversely affecting its financial results. The Board looks to mitigate the failure of any key suppliers by having a wide supplier base with known alternatives as well as maintaining a sufficient level of stock within its UK operations. The Group has developed business continuity and disaster recovery plans. The COVID 19 pandemic has shown that with good communication with all business partners and the full application of emergency procedures, a level of business can be maintained. The Group also maintains insurance to cover business interruption and damage to property from such events.
As a distribution business, the impact of any changes in product preference and changing fashions in the marketplace is limited to the level of stock held at any one time. Changes in ranges offered to the wider customer base generally take place at the lowest level of stock holding. Any cost of discounting of stock that may be necessary is built into the general business model.
Economic Conditions
The Group is dependent on the level of activity in various markets and is therefore susceptible to any changes in economic conditions. Lower levels of activity in key markets in which the Group operates could reduce sales volumes adversely, thus affecting the Group's financial results. The Group monitors trends in the key industries and markets the Group operates in. As a distribution and selling business the Group is well placed to react to changes relatively quickly and implement changes to the business model and practices.
Fluctuations in Input Prices
Adverse fluctuations in raw material commodity prices could affect the profitability of the Group albeit such increases are likely to have an industry wide impact and as such would result in an increase in sales prices to end customers to negate this. A proportion of the Group's purchases are transacted in Euros and US Dollars and as such we are susceptible to foreign exchange risk on such purchases albeit in most instances the Group enters forward contracts to mitigate against any exposure.
In addition, rising freight costs recently experienced inevitably increase the costs of goods from overseas suppliers. Short term increases are negated by maintaining sufficient levels of stock on hand with longer term increases reflected in subsequent price increases passed on to customers.
Post balance sheet events
Share Transactions
On 11 January 2022, the Company allotted 40,000,000 new £0.01 Ordinary Shares for consideration of £0.35 per share, totalling £14,000,000 and allotted a further 5,000,000 new £0.01 Ordinary Shares as part of the consideration for the acquisition of the entire share capital of Valley Wholesale Carpets (2004) Limited.
On 28 January 2022, the Company allotted 5,714,286 new £0.01 Ordinary Shares for consideration of £0.35 per share, totalling £2,000,000.
On 22 February 2022, the Company, by way of a capital reduction under section 648 of the Companies Act 2006, reduced the share premium account by £22,000,000 and this balance was transferred to the distributable retained earnings of the Company.
On 23 March 2022, the Company allotted 204,000 new £0.01 Ordinary Shares for consideration of £0.10 per share, totalling £20,400 and allotted a further 2,500 new £0.01 Ordinary Shares for consideration of £0.21 per share, totalling £525. These shares were issued under the Company's SAYE scheme.
On 4 April 2022, the Company allotted 500,000 new £0.01 Ordinary Shares as part of the consideration for the acquisition of the entire share capital of Delta Carpets (Holdings) Limited by Likewise Floors Limited.
Acquisitions
On 14 January 2022, the Company acquired the entire issued share capital of Valley Wholesale Carpets (2004) Limited. Consideration of £30.0m for the purchase of the new subsidiary was in the form of: £14.0m cash, £10.0m cash extracted from the acquired company, £1.0m deferred cash consideration and the issue of 5,000,000 new £0.01 shares in Likewise Group Plc valued at £1.8m at the date of acquisition and which includes a guaranteed cash payment of the difference between £1 per share and the share price at 14 January 2024. The fair value of this arrangement as at the grant date has been reflected in the purchase consideration outlined.
On 1 April 2022, Likewise Floors Limited, a subsidiary of the Company, acquired the entire issued share capital of Delta Carpets (Holdings) Limited and its wholly owned subsidiary Delta Carpets Limited. Consideration of £3.0m was paid in the form of: £1.5m cash, £1.0m cash extracted from the acquired companies and 500,000 new £0.01 shares in Likewise Group Plc valued at £0.2m at the date of acquisition and which includes a guaranteed cash payment of the difference between £1 per share and the share price at 1 April 2024.
Directors' statement of compliance with duty to promote the success of the Group
A director of a company must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
• The likely consequences of any decision in the long term
• The interests of the company's employees
• The need to foster the company's business relationships with suppliers, customers and others
• The impact of the company's operations on the community and the environment
• The desirability of the company maintaining a reputation for high standards of business conduct, and
• The need to act fairly as between members of the company.
The directors consider it crucial that the Group maintains a reputation for the highest standards of business conduct and are responsible for setting, reviewing and upholding the culture, values, standards, ethics and reputation of the Group to ensure obligations to key stakeholders are met. By using the core values of the business, we seek to sustain and develop strong, stable, profitable partnerships with all our customers, employees and suppliers by providing outstanding products.
During the year ended 31 December 2021, the directors consider that they have at all times acted in a way that would most likely promote the success of the Group and for the benefit of its members as a whole, and in making those decisions have had particular regard the points outlined above.
The engagement with key stakeholders is summarised as follows:
Our people
Our employees foster strong relationships with both customers and suppliers and are integral in delivering the Group's strategy. As such the Group is committed to attracting talent, developing individuals, and ensuring employees are rewarded for their contribution to the growth of the business. The Board ensure that information and decisions of interest or concern to employees are shared at all levels.
Our shareholders
The shareholders of the business have helped us build the business to where we are today. As we continue on our growth trajectory the Group ensures shareholders are regularly updated on the latest developments. Announcements are shared on the Company's investor website.
Should shareholders have further questions, the AGM promotes the opportunity for questions to be put to the Board or alternatively they are welcome to contact the Board via the investor website to raise queries important to them.
Business relationships
Relationships with our customers are at the heart of what we do. The Group is committed to developing lasting relationships by providing great products, service and value for our customers.
With the help of our employees, and in line with government guidelines customers have been visited regularly to drive the quality of our service offering whilst also providing the opportunity to obtain timely feedback on products, service and any changes in consumer trends that help us develop our business to continue to meet their expectations.
Strong relationships have also been developed with suppliers which continue to allow us to exceed customer expectations. Regular dialogue with suppliers provides mutually beneficial feedback on products whilst exploring new ranges that may be of interest to our customers.
Community and environment
We try to be a positive influence in the life of the communities in which we operate and strive to minimise our impact on the environment as much as possible.
Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2021
|
|
|
|
|
2021 |
|
2020 |
|||
|
|
|
|
Note |
£ |
|
£ |
|||
|
|
|
|
|
|
|||||
|
Revenue |
5 |
60,490,559 |
|
47,322,673 |
|||||
|
Cost of sales |
|
(42,350,337) |
|
(34,992,370) |
|||||
|
Gross profit |
|
18,140,222 |
|
12,330,303 |
|||||
|
|
|
|
|
|
|||||
|
Other operating income |
6 |
212,183 |
|
852,448 |
|||||
|
Administrative expenses |
|
(11,061,598) |
|
(10,323,473) |
|||||
|
Distribution costs |
|
(7,050,344) |
|
(5,624,387) |
|||||
|
Impairment losses on trade receivables |
|
(42,241) |
|
(64,373) |
|||||
|
Profit/(loss) from operations |
|
198,222 |
|
(2,829,482) |
|||||
|
|
|
|
|
|
|||||
|
Finance income |
10 |
173 |
|
10 |
|||||
|
Finance costs |
10 |
(425,277) |
|
(227,969) |
|||||
|
Loss on revaluation of consideration on acquisition |
|
- |
|
(217,540) |
|||||
|
Profit/(loss) before tax |
|
(226,882) |
|
(3,274,981) |
|||||
|
|
|
|
|
|
|||||
|
Taxation |
11 |
81,459 |
|
203,677 |
|||||
|
Loss for the year |
|
(145,423) |
|
(3,071,304) |
|||||
|
Other comprehensive income: |
|
|
|
||||||
|
Items that will not be reclassified to profit or loss: |
|
|
|
|
|||||
|
Revaluation of land and buildings |
13 |
1,802,257 |
|
238,757 |
|||||
|
Actuarial loss on defined benefit schemes |
31 |
(20,000) |
|
(20,000) |
|||||
|
Deferred tax on revaluation |
11 |
(471,901) |
|
- |
|||||
|
|
|
1,310,356 |
|
218,757 |
|||||
|
Items that will or may be reclassified to profit or loss: |
|
|
|
|
|||||
|
Exchange losses arising in relation to translation of foreign operations |
|
(17,222) |
|
(39,403) |
|||||
|
|
|
(17,222) |
|
(39,403) |
|||||
|
Total comprehensive income |
|
1,147,711 |
|
(2,891,950) |
|||||
The total basic loss per share attributable to the ordinary equity holders of the Company was £0.001 (2020: loss of £0.020). The total diluted loss per share attributable to the ordinary equity holders of the Company was £0.001 (2020: loss of £0.018).
Consolidated statement of financial position as at 31 December 2021
|
|
2021 |
|
2020 |
|||
|
Note |
£ |
|
£ |
|||
|
Assets |
|
|
|
|||
|
Non‑current assets |
|
|
|
|
||
|
Property, plant and equipment |
13 |
19,718,721 |
|
11,256,599 |
||
|
Other intangible assets |
14 |
3,520,997 |
|
3,808,425 |
||
|
Goodwill |
15 |
4,216,728 |
|
4,216,728 |
||
|
Trade and other receivables |
18 |
136,848 |
|
- |
||
|
|
|
|
|
|
||
|
|
|
27,593,294 |
|
19,281,752 |
||
|
Current assets |
|
|
|
|
||
|
Inventories |
17 |
10,256,740 |
|
7,555,806 |
||
|
Trade and other receivables |
18 |
9,775,075 |
|
7,466,158 |
||
|
Cash and cash equivalents |
|
8,447,550 |
|
2,820,895 |
||
|
|
|
|
|
|
||
|
|
|
28,479,365 |
|
17,842,859 |
||
|
|
|
|
|
|
||
|
Total assets |
|
56,072,659 |
|
37,124,611 |
||
|
Liabilities |
|
|
|
|||
|
Non‑current liabilities |
|
|
|
|
||
|
Loans and borrowings |
21 |
12,129,444 |
|
6,749,655 |
||
|
Deferred tax liability |
11 |
1,404,650 |
|
700,484 |
||
|
|
|
|
|
|
||
|
|
|
13,534,094 |
|
7,450,139 |
||
|
Current liabilities |
|
|
|
|
||
|
Trade and other liabilities |
20 |
15,802,034 |
|
15,479,985 |
||
|
Loans and borrowings |
21 |
4,179,892 |
|
2,224,566 |
||
|
Provisions |
24 |
202,676 |
|
382,722 |
||
|
|
|
|
|
|
||
|
|
|
20,184,602 |
|
18,087,273 |
||
|
Total liabilities |
|
33,718,696 |
|
25,537,412 |
||
|
Net assets |
|
22,353,963 |
|
11,587,199 |
||
|
Share capital |
27 |
1,923,742 |
|
1,523,420 |
||
|
Share premium |
|
22,458,816 |
|
13,389,295 |
||
|
Share option reserve |
32 |
308,776 |
|
159,566 |
||
|
Revaluation reserve |
|
2,406,127 |
|
1,094,771 |
||
|
Foreign exchange reserve |
|
(56,625) |
|
(39,403) |
||
|
Warrant reserve |
|
128,170 |
|
128,170 |
||
|
Retained earnings |
|
(4,815,043) |
|
(4,668,620) |
||
|
Total equity |
|
22,353,963 |
|
11,587,199 |
||
Consolidated statement of changes in equity for the year ended 31 December 2021
|
|
Share capital |
Share premium |
Share option reserve |
Revaluation reserve |
Foreign exchange reserve |
Warrant reserve |
Retained earnings |
Total attributable to equity holders of parent |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
At 1 January 2021 |
1,523,420 |
13,389,295 |
159,566 |
1,094,771 |
(39,403) |
128,170 |
(4,668,620) |
11,587,199 |
11,587,199 |
|
Loss for the year |
- |
- |
- |
- |
- |
- |
(145,423) |
(145,423) |
(145,423) |
|
Other comprehensive income (see note 30) |
- |
- |
- |
1,311,356 |
(17,222) |
- |
(1,000) |
1,293,134 |
1,293,134 |
|
Total comprehensive income for the year |
- |
- |
- |
1,311,356 |
(17,222) |
- |
(146,423) |
1,147,711 |
1,147,711 |
|
Issue of share capital |
400,000 |
9,600,000 |
- |
- |
- |
- |
- |
10,000,000 |
10,000,000 |
|
Share options exercised |
322 |
2,898 |
- |
- |
- |
- |
- |
3,220 |
3,220 |
|
Share issue costs |
- |
(533,377) |
- |
- |
- |
- |
- |
(533,377) |
(533,377) |
|
Share options valuation |
- |
- |
149,210 |
- |
- |
- |
- |
149,210 |
149,210 |
|
Total contributions by and distributions to owners |
400,322 |
9,069,521 |
149,210 |
- |
- |
- |
- |
9,619,053 |
9,619,053 |
|
At 31 December 2021 |
1,923,742 |
22,458,816 |
308,776 |
2,406,127 |
(56,625) |
128,170 |
(4,815,043) |
22,353,963 |
22,353,963 |
Consolidated statement of changes in equity for the year ended 31 December 2020
|
|
Share capital |
Share premium |
Share option reserve |
Revaluation reserve |
Foreign exchange reserve |
Warrant reserve |
Retained earnings |
Total attributable to equity holders of parent |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
At 1 January 2020 |
1,523,420 |
13,389,295 |
90,574 |
871,514 |
- |
128,170 |
(1,592,446) |
14,410,527 |
14,410,527 |
|
Loss for the year |
- |
- |
- |
- |
- |
- |
(3,071,304) |
(3,071,304) |
(3,071,304) |
|
Other comprehensive income (see note 30) |
- |
- |
- |
223,257 |
(39,403) |
- |
(4,870) |
178,984 |
178,984 |
|
Total comprehensive income for the year |
- |
- |
- |
223,257 |
(39,403) |
- |
(3,076,174) |
(2,892,320) |
(2,892,320) |
|
Share options valuation |
- |
- |
68,992 |
- |
- |
- |
- |
68,992 |
68,992 |
|
Total contributions by and distributions to owners |
- |
- |
68,992 |
- |
- |
- |
- |
68,992 |
68,992 |
|
At 31 December 2020 |
1,523,420 |
13,389,295 |
159,566 |
1,094,771 |
(39,403) |
128,170 |
(4,668,620) |
11,587,199 |
11,587,199 |
Consolidated statement of cash flows for the year ended 31 December 2021
|
|
|
|
|
2021 |
|
2020 |
||
|
|
|
|
|
£ |
|
£ |
||
|
Cash flows from operating activities |
|
|
|
|
||||
|
Loss for the year |
|
(145,423) |
|
(3,071,304) |
||||
|
Adjustments for |
|
|
|
|
||||
|
Depreciation and amortisation |
|
2,121,858 |
|
1,733,339 |
||||
|
Impairment of property, plant and equipment |
|
147,988 |
|
91,733 |
||||
|
Revaluation of consideration |
|
- |
|
217,540 |
||||
|
Taxation |
|
(81,459) |
|
(203,677) |
||||
|
Finance income |
|
(173) |
|
(10) |
||||
|
Finance costs |
|
425,277 |
|
227,969 |
||||
|
(Gain)/loss on sale of property, plant and equipment |
|
(22,846) |
|
222,096 |
||||
|
Pension contributions |
|
(20,000) |
|
(20,000) |
||||
|
AIM listing costs |
|
352,142 |
|
- |
||||
|
Increase in provisions |
|
(180,046) |
|
382,722 |
||||
|
Share options issued |
|
149,210 |
|
68,992 |
||||
|
Net foreign exchange gain |
|
(15,575) |
|
(41,378) |
||||
|
|
|
2,730,953 |
|
(391,978) |
||||
|
Movements in working capital: |
|
|
|
|
||||
|
Increase in trade and other receivables |
|
(2,132,041) |
|
(98,740) |
||||
|
(Increase)/decrease in inventories |
|
(2,700,934) |
|
1,511,188 |
||||
|
Increase in trade and other payables |
|
1,802,049 |
|
3,855,487 |
||||
|
Cash (used in)/generated from operations |
|
(299,973) |
|
4,875,957 |
||||
|
|
|
|
|
|
||||
|
Income taxes paid |
|
- |
|
114,814 |
||||
|
Net cash (used in)/from operating activities |
|
(299,973) |
|
4,990,771 |
||||
|
Cash flows from investing activities |
|
|
|
|
||||
|
Purchases of property, plant and equipment |
|
(1,593,269) |
|
(1,086,264) |
||||
|
Proceeds from disposal of property, plant and equipment |
|
27,008 |
|
- |
||||
|
Acquisition of subsidiaries |
|
- |
|
(891,770) |
||||
|
Deferred consideration paid |
|
(1,480,000) |
|
(700,000) |
||||
|
Net cash acquired with subsidiaries |
|
- |
|
136,958 |
||||
|
Interest received |
|
173 |
|
10 |
||||
|
Net cash used in investing activities |
|
(3,046,088) |
|
(2,541,066) |
||||
|
Cash flows from financing activities |
|
|
|
|
||||
|
Interest paid |
|
(425,277) |
|
(99,585) |
||||
|
Consideration for new shares |
|
10,003,220 |
|
- |
||||
|
Costs of share issue and AIM listing |
|
(885,519) |
|
- |
||||
|
Repayment of lease liabilities |
|
(886,625) |
|
(863,841) |
||||
|
Increase in invoice discounting |
|
1,266,279 |
|
740,562 |
||||
|
Repayment of loans |
|
(99,362) |
|
(24,321) |
||||
|
Net cash from/(used in) financing activities |
|
8,972,716 |
|
(247,185) |
||||
|
Net cash increase in cash and cash equivalents |
|
5,626,655 |
|
2,202,520 |
||||
|
|
|
|
|
|
||||
|
Cash and cash equivalents at the beginning of year |
|
2,820,895 |
|
618,375 |
||||
|
Cash and cash equivalents at the end of the year |
|
8,447,550 |
|
2,820,895 |
||||
Cash and cash equivalents at 31 December 2021 of £8,447,550 (2020: £2,820,895) comprised of cash and cash equivalents of £8,447,550 (2020: £2,820,895) less bank overdrafts of £Nil (2020: £Nil).
Notes to the consolidated financial statements for the year ended 31 December 2021
1. General information
The Company is a public company limited by shares, registered in England and Wales. On 18 August 2021, the Company listed on the AIM Market. The registered company number is 08010067 and the address of the registered office is Unit 4 Radial Park, Solihull Parkway, Birmingham Business Park, Solihull, England, B37 7YN.
The principal activity of the Group is the wholesale distribution of floorcoverings and associated products.
2. Basis of preparation
These financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The Parent Company financial statements present information about the Company as a separate entity.
The financial information is presented in pounds sterling, which is the functional currency of the entity and rounded to the nearest £. The financial statements are prepared on the historical cost basis unless otherwise specified within these accounting policies.
Both the Company and consolidated financial statements have been prepared and approved by the Directors in accordance with UK adopted International Accounting Standards. On publishing the Company financial statements here together with the consolidated financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and statement of comprehensive income and related notes.
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
3. Accounting policies
3.1 Going concern
The consolidated financial statements for the Group have been prepared on a going concern basis.
Whilst the impact of the COVID 19 pandemic was still prevalent at the beginning of 2021, the business continued to benefit from strong trading activity in the home improvement sector. Whilst levels of employee absence remained higher due to the requirement to isolate, the business' operations were able to successfully manage this absence whilst ensuring continuity of service for our customers.
On 18 August 2021, the Company was admitted to trading on the AIM Market, issuing 40,000,000 new shares and raising gross proceeds of £10.0m. An additional £2.0m was also raised in January 2022 as a result of an extended offer to existing shareholders. Listing on AIM provided the Group with further funding with which to continue to invest in the organic growth of the Likewise business whilst also identifying new acquisition targets that would be earnings enhancing to the Group. The Company's admission to AIM also provides further awareness of the brand as well as accessibility to new institutional and private investors alike.
The Group continues to utilise invoice financing arrangements in some subsidiaries and has the option to draw on additional authorised facilities to support working capital requirements. The Group has operated within these facilities throughout the year and continues to do so in 2022. The directors are confident that the Group will be able to operate within the finance facilities available to us.
The Board have also undertaken assessments of going concern by building a cash flow model through to December 2023, based on 2021 actuals, 2022 budget and forecast performance for 2023. These cashflows indicate that the business has adequate resources to continue to operate for the foreseeable future and within the current financing arrangements in place. Furthermore, following the acquisition of Valley Wholesale Carpets (2004) Limited and Delta Carpets (Holdings) Limited and their subsidiaries there are further performance enhancing results not factored into the original cash flow forecasts.
Overall, given the strength of the Group's balance sheet, significant cash reserves on hand, availability of financing arrangements and the strong forecast performance of the Group, this provides the Directors with sufficient assurance on the Group's ability to continue as a going concern, and therefore adopt the going concern basis of accounting in preparing the financial statements.
3.2 Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an investee so as to obtain benefits from its activities, has exposure, or rights, to variable returns and can use its power to affect those returns. In assessing control, potential voting rights that are currently exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
3.3 Impact of new international reporting standards
There were a number of narrow scope amendments to existing standards which were effective from 1 January 2021. None of these had an impact on the Group.
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting periods and have not been early adopted by the Group. These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.
3.4 Revenue
Revenue comprises sales of goods to customers outside the Group, less an appropriate deduction for discounts, and is stated at the fair value of the consideration net of value added tax and other sales taxes.
Revenue and receivables are recognised when performance obligations are satisfied and the goods are delivered to customers as this is the point in time that the consideration is unconditional, control of goods has passed and only the passage of time is required before the payment is due.
3.5 Finance and income costs
Interest income and expense is recognised using the effective interest method which calculates the amortised cost of a financial asset or liability and allocates the interest income or expense over the relevant period.
3.6 Property, plant and equipment
Property, plant and equipment under the cost model are stated at historical cost less depreciation less any recognised impairment losses. Cost includes expenditure that is directly attributable to the acquisition or construction of these items. Subsequent costs are included in the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the company and the costs can be measured reliably. All other costs, including repairs and maintenance costs, are charged to the Income Statement in the period in which they are incurred.
Depreciation is provided on all property, plant and equipment and is calculated as follows:
Freehold property ‑ 2% straight line
Leasehold improvements ‑ straight line over the term of the lease
Plant and machinery ‑ 12.5% ‑ 15% straight line
Motor vehicles ‑ 25% ‑ 33% straight line
Fixtures, fittings and computer equipment ‑ 20% ‑ 33% straight line
Depreciation is provided on cost less residual value. The residual value, depreciation methods and useful lives are annually reassessed.
Each asset's estimated useful life has been assessed with regard to its own physical life limitations and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all machinery and equipment, with annual reassessments for major items. Changes in estimates are accounted for prospectively.
The gain or loss arising on disposal or scrapping of an asset is determined as the difference between the sales proceeds, net of selling costs, and the carrying amount of the asset and is recognised in the Income Statement.
3.7 Revaluation of property
Individual freehold properties are carried at current year value at fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the Consolidated Statement of Financial Position date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in the Consolidated Statement of Comprehensive Income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in the Income Statement.
The difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost is transferred from revaluation surplus to retained earnings at the end of each reporting period. Any remaining revaluation surplus included in equity is transferred directly to retained earnings when the asset is disposed of.
3.8 Impairment of non-financial assets (excluding Goodwill)
At each reporting date, the directors review the carrying amounts of the company's non current assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the directors estimate the recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash generating unit is reduced to its recoverable amount. The impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.
An impairment loss is recognised as an expense immediately.
Where an impairment loss on non financial assets subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash generating unit in prior periods. A reversal of an impairment loss is recognised in the Income Statement immediately.
3.9 Inventories
Inventory is valued at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, inventories are assessed for impairment. If inventories are impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Income Statement.
3.10 Cash at bank
Cash at bank comprise cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less from inception.
3.11 Financial instruments
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the financial instrument.
Financial assets and financial liabilities are measured initially at fair value plus transactions costs. Financial assets and financial liabilities are measured subsequently as described below.
Cash equivalents comprise short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment with a maturity of three months or less is normally classified as being short term.
Derivatives, including forward foreign exchange contracts, are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re measured at their fair value. Changes in the fair value of derivatives are recognised in the Income Statement in finance costs or income as appropriate.
3.12 Financial assets
Trade and other receivables are recorded initially at transaction price and subsequently measured at amortised cost. This results in their recognition at nominal value less an allowance for any doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward looking information. An additional reserve is established, where required, when a loss is both probable and the amount is known.
ECLs are a probability weighted estimate of lifetime credit losses. Under the ECL model, the Group calculates the allowance for credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these probability weighted outcomes. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that Group expects to receive) with a discount factor applied to such overdue amounts. The discount matrix ("ECL Matrix") below is applied to derive an ECL for overdue amounts:
|
Past due (days) |
31-60 |
61-90 |
90-120 |
120-250 |
|
Discounts to Amounts Overdue |
0% |
0% |
5% |
50% |
The Group exercises its discretion in the application of discounts outside of the ECL Matrix based on extenuating circumstances that may apply from time to time to the Group's trade receivables (see note 18). An example of such an extenuating circumstance may occur when it is known that an overdue amount will be collected post a reporting or measurement date.
3.13 Financial liabilities
The Group's financial liabilities include trade and other payables and borrowings.
Interest bearing bank loans and overdrafts are initially recorded at fair value, which equals the proceeds received, net of direct interest costs. They are subsequently held at amortised cost. Finance charges, including premiums payable on settlement or redemption are accounted for using an effective interest rate method and are added to or deducted from the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost. Generally, this results in their recognition at their nominal value.
3.14 Foreign currency
The presentation currency for the Group's historical financial information is pounds sterling.
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Any gain or loss on translation of monetary foreign currency assets and liabilities arising from a movement in exchange rates subsequent to initial measurement is included as an exchange gain or loss in the Consolidated Statement of Profit or Loss.
The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rate. Income Statements and cash flows of such subsidiaries are translated into Sterling at the average rates of exchange. The adjustments to period end rates are taken to foreign exchange reserve in equity and reported in the Other Comprehensive Income.
3.15 Taxation
Current taxation
Current taxation is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the reporting date and includes adjustments to tax payable or recoverable in respect of previous periods.
Deferred taxation
Deferred taxation is calculated using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the historical financial information. However, if the deferred tax arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. No deferred tax is recognised on initial recognition of goodwill or on investment in subsidiaries. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the year end date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax liabilities are provided in full, and are not discounted.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority where there is an intention to settle the balances on a net basis.
3.16 Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
− fair values of the assets transferred
− liabilities incurred to the former owners of the acquired business
− equity interests issued by the Group
− fair value of any asset or liability resulting from a contingent consideration arrangement, and
− fair value of any pre existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
Acquisition related costs are expensed as incurred.
The excess of the consideration transferred and acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in the Income Statement as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the Income Statement.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in the Income Statement.
3.17 Goodwill
Goodwill is initially recognised and measured as set out above.
Goodwill not attributed to a specific intangible asset is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group's subsidiaries expected to benefit from the synergies of the combination. If the recoverable value of the subsidiary is less than the carrying amount of goodwill, the impairment loss is recognised. An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
3.18 Intangible assets
Other intangible assets
Goodwill attributable to the brand name of acquired subsidiaries or customer base is initially recognised and measured as set out above. Licences are initially recognised at cost.
Amortisation is provided on all other intangible assets and is calculated as follows:
|
|
|
Brand name |
15 years straight line |
|
|
|
Customer base |
15 years straight line |
|
|
|
Licenses |
10 years straight line |
The useful lives of intangible assets are annually reassessed and all assets are reviewed for impairment at least annually. On disposal of a subsidiary, the attributable amount of intangible assets is included in the determination of the profit or loss on disposal.
3.19 Employment benefits
Provision is made in the financial statements for all employee benefits. Liabilities for wages and salaries, including non monetary benefits and annual leave obliged to be settled within 12 months of the reporting date, are recognised in accruals.
Contributions to defined contribution pension plans are charged to the Income Statement in the year to which the contributions relate.
William Armes Limited, a subsidiary of the Group operates a defined benefit pension plan for certain employees.
The liability recognised in the Consolidated Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
Where the calculation results in a benefit to the Group, the asset recognised is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan.
3.20 Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right of use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
Right of use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.
3.21 Borrowing costs
Borrowing costs are recognised in the Income Statement in the year in which they are incurred.
3.22 Share based payments
The fair value of equity instruments granted to employees is charged to the Statement of Comprehensive Income, with a corresponding increase in equity. The fair value of share options is measured at grant date using the Black Scholes pricing model and spread over the period during which the employee becomes unconditionally entitled to the award. The charge is adjusted to reflect the number of shares or options that vest.
3.23 Invoice discounting
The Group has an invoice discounting arrangement. The amount owed by customers to the Group are included within trade receivables and the amount owed to the invoice discounting company is included within borrowings. The amount owed to the invoice discounting company represents the difference between the amounts advanced by the invoice discounting company and the invoices discounted. The interest element of the invoice discounting charges and other related costs are recognised as they accrue and are included in the Income Statement with other finance costs.
3.24 Segment reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses related to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Chief Operating Decision Maker has been identified as the Board of Executive Directors, at which level strategic decisions are made.
Details of the Group's reporting segments are provided in note 5.
3.25 Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.
Government grants receivable from central government under the Coronavirus Job Retention Scheme are included within other operating income in the Consolidated Statement of Profit or Loss and are not offset against the related expenses.
3.26 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
4. Judgements and key sources of estimation uncertainty
The preparation of the financial statements, in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the carrying amounts of assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses during the period. These judgements, estimates and assumptions are continually evaluated by management and are based upon historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position date, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are as follows:
Impairment of trade receivables
Trade and other receivables are recognised at nominal value less an allowance for doubtful debts. This allowance for expected credit losses (ECL) may be established where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward looking information. An additional reserve is established, where required, when a loss is both probable and the amount is known. See notes 3.12 and 18 for further information.
Defined benefit pension scheme
Assumptions for future inflation linked pension increases (where applicable) are based on the appropriate headline index, adjusted where necessary to reflect any caps or collars, bearing in mind the proximity of the future inflation assumption to those caps and collars and the expected variability of future inflation increases. All other assumptions have been set in accordance with the statement of funding principals. No allowances have been made for members transferring benefits out of the scheme in future. The assumptions selected and associated sensitivity analysis are disclosed in note 31.
Inventory valuation
This is provided for on the basis of the age of the items and dependent on the frequency of component use. The Group makes appropriate provision for slow moving and discontinued inventory items although a significant shift in consumer market or customer demand may result in additional provision.
Valuation of land and buildings
The Group carries its land and buildings at fair value, with changes in fair value being recognised in Other Comprehensive Income. The Group engaged independent valuation specialists to determine fair value at 31 December 2021. Significant changes in the commercial property market may impact the valuation of the Group's property. See note 13 for further information.
5. Segmental reporting
For the purposes of segmental reporting, the Group's Chief Operating Decision Maker (CODM) is considered to be the Executive Board of Directors. The Board has not identified any separate operating segments within the business. The Board reviews revenue and expenses for the business as a whole and makes decisions about resources and assesses performance based on this information.
Revenue arises entirely through the wholesale of goods. Segmental analysis is therefore not presented.
The Group is not reliant on any one customer and no customer exceeds 10% of total annual turnover.
The following is an analysis of the Group's revenue for the year from continuing operations:
|
|
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
|
||||
|
Sale of goods |
60,490,559 |
|
47,322,673 |
||||
|
|
60,490,559 |
|
47,322,673 |
||||
The Group generates revenue from both the UK and overseas as detailed below:
|
|
|
|
|
2021 |
|
2020 |
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
|||
|
United Kingdom |
60,254,713 |
|
46,983,834 |
|||
|
Rest of Europe |
225,771 |
|
338,839 |
|||
|
Rest of the world |
10,075 |
|
- |
|||
|
|
60,490,559 |
|
47,322,673 |
|||
6. Other operating income
|
|
|
|
|
2021 |
|
2020 |
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
|||
|
Government grants receivable |
212,183 |
|
852,448 |
|||
|
|
212,183 |
|
852,448 |
|||
Government grants represent income receivable from central government under the Coronavirus Job Retention Scheme to cover some of the costs of employing certain members of staff placed on furlough leave in response to the COVID 19 pandemic.
7. Operating profit/(loss)
Operating profit/(loss) is stated after charging:
|
|
|
|
|
|
2021 |
2020 |
|
|||
|
|
|
|
|
|
£ |
£ |
|
|||
|
|
|
|
|
|
||||||
|
Underlying expenses |
|
|
||||||||
|
Depreciation of property, plant and equipment |
551,124 |
490,533 |
||||||||
|
Depreciation of right‑of‑use assets |
1,283,306 |
955,378 |
||||||||
|
Gain on foreign exchange |
(38,701) |
(28,758) |
||||||||
|
Auditor's remuneration: |
105,000 |
100,000 |
||||||||
|
‑ work in respect of AIM listing |
95,050 |
- |
||||||||
|
Short term lease expense: |
127,620 |
112,755 |
||||||||
|
‑ property |
150,000 |
137,500 |
||||||||
|
Amortisation of intangible assets |
287,428 |
287,428 |
||||||||
|
Share based payments |
149,210 |
68,992 |
||||||||
|
AIM listing costs |
352,142 |
- |
||||||||
|
Acquisition related costs |
- |
237,185 |
||||||||
|
Restructuring costs |
98,253 |
821,709 |
||||||||
|
Impact of IFRS 16 |
213,765 |
339,404 |
||||||||
|
Loss from new operations (Likewise Midlands) |
724,474 |
- |
||||||||
Acquisition related costs in the prior year related to the costs of acquisition of A&A Carpets Limited.
8. Auditors' remuneration
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
Fees payable to the Group's auditors for the audit of the Group's financial statements |
105,000 |
100,000 |
|||
|
Fees payable to the Group's auditors: |
|
|
|||
|
‑ work in respect of AIM listing ‑ through profit and loss |
95,050 |
- |
|||
|
‑ work in respect of AIM listing ‑ through equity |
24,950 |
- |
|||
|
|
|||||
9. Directors and employees
|
Group |
|
|
|
2021 |
2020 |
|
|
|
|
|
|
£ |
£ |
|
|
Employee benefit expenses (including Directors) comprise: |
|
|
||||
|
Wages and salaries |
8,197,734 |
6,586,038 |
||||
|
Social security costs |
852,302 |
639,743 |
||||
|
Pension costs |
318,167 |
283,550 |
||||
|
Compensation for loss of office |
8,361 |
41,842 |
||||
|
Share based payments |
|
149,210 |
68,992 |
|||
|
|
|
9,525,774 |
7,620,165 |
|||
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the Directors of the Company, and other senior management.
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
|
|
|
|||
|
Remuneration |
731,028 |
610,976 |
|||
|
Social security costs |
98,675 |
77,302 |
|||
|
Group pension contribution to defined contribution schemes |
61,347 |
61,347 |
|||
|
Share based payments |
77,367 |
17,140 |
|||
|
|
968,417 |
766,765 |
|||
During 2019, key management personnel were granted 1,200,000 options under the Group SAYE scheme at an option price of £0.10 per share and 3,900,000 options under the Group EMI scheme at an option price of £0.10 per share. During 2020, 2,000,000 options were granted to key management personnel under the Group EMI scheme at an option price of £0.10 per share.
During 2021, 85,714 options were granted to key management personnel under the Group SAYE scheme at an option price of £0.21.
|
Group
|
||||||||||
|
The monthly average number of persons, including the Directors, employed by the Group during the year was as follows:
|
||||||||||
|
|
|
|
|
2021 |
2020 |
|||||
|
|
|
|
|
No. |
No. |
|||||
|
Directors |
4 |
4 |
||||||||
|
Other employees |
254 |
229 |
||||||||
|
|
258 |
233 |
||||||||
|
|
||||||||||
|
|
|
|
|
2021 |
2020 |
|||||
|
|
|
|
|
£ |
£ |
|||||
|
Remuneration of directors |
|
|
||||||||
|
Remuneration |
298,732 |
230,388 |
||||||||
|
Social security costs |
40,037 |
25,922 |
||||||||
|
Group pension contribution to defined contribution schemes |
25,600 |
25,600 |
||||||||
|
Share based payments |
14,418 |
14,418 |
||||||||
|
|
378,787 |
296,328 |
||||||||
|
In addition, fees of £83,000 (2020: £Nil) were paid to non‑executive Directors in the year.
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
No. |
No. |
|
|
|
|
|||
|
Directors accruing benefits under money purchase pension schemes |
1 |
1 |
|||
|
|
1 |
1 |
|||
2,700,000 share options were granted to directors during 2019 at an exercise price of £0.10 per share. There have been no options exercised or additional options granted in either the prior or current year.
10. Finance income and expense
|
Recognised in profit or loss |
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
Interest on: |
|
|
|||
|
Bank deposits |
4 |
10 |
|||
|
Other interest receivable |
169 |
- |
|||
|
Total finance income |
173 |
10 |
|||
|
Finance expense |
|
|
|||
|
Bank loan interest payable |
84,473 |
81,299 |
|||
|
Interest on lease liabilities |
317,913 |
121,288 |
|||
|
Other interest payable |
- |
13,558 |
|||
|
Invoice discounting facility interest payable |
22,891 |
11,824 |
|||
|
Total finance expense |
425,277 |
227,969 |
|||
|
|
|
|
|||
|
Net finance expense recognised in profit or loss |
(425,104) |
(227,959) |
|||
11. Taxation on ordinary activities
11.1 Inco me tax recognised in profit or loss
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
Current tax |
|
|
|||
|
Current tax on losses for the year |
- |
(7,981) |
|||
|
Adjustments in respect of prior years |
(313,724) |
(106,833) |
|||
|
Total current tax |
(313,724) |
(114,814) |
|||
|
Deferred tax expense |
|
|
|||
|
Origination and reversal of timing differences |
232,265 |
(88,863) |
|||
|
Total deferred tax |
232,265 |
(88,863) |
|||
|
|
|
|
|||
|
Total tax credit |
(81,459) |
(203,677) |
|||
|
Total tax credit |
|
|
|
Total tax credit |
(81,459) |
(203,677) |
|
|
(81,459) |
(203,677) |
|
The reasons for the difference between the actual tax credit for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
|
||||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
£ |
£ |
|
|
|
|
|
||||
|
Loss for the year |
(145,423) |
(3,071,304) |
||||
|
Income tax credit |
(81,459) |
(203,677) |
||||
|
Loss before income taxes |
(226,882) |
(3,274,981) |
||||
|
|
|
|
||||
|
Tax using the Company's domestic tax rate of 19% (2020:19%) |
(43,108) |
(622,246) |
||||
|
Fixed asset differences |
(80,051) |
(2,552) |
||||
|
Expenses not deductible for tax purposes |
76,135 |
101,999 |
||||
|
Adjustments to tax charge in respect of prior periods |
(313,724) |
(106,833) |
||||
|
Non‑taxable consolidation adjustments |
(132,366) |
66,048 |
||||
|
Remeasurement of deferred tax |
221,009 |
7,235 |
||||
|
Deferred tax not recognised |
208,715 |
408,279 |
||||
|
Other tax adjustments, reliefs and transfers |
- |
(43,395) |
||||
|
Other differences leading to a decrease in the tax charge |
(18,069) |
(12,212) |
||||
|
Total tax credit |
(81,459) |
(203,677) |
||||
|
11.2 Deferred tax balances
|
|||||
|
The following is the analysis of deferred tax liabilities presented in the consolidated statement of financial position:
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
Deferred tax liabilities |
(1,404,650) |
(700,484) |
|||
|
|
(1,404,650) |
(700,484) |
|||
|
A deferred tax asset of £1,812,747 (2020: £1,682,996) has not been recognised in the financial statements in relation to these losses. In addition, a deferred tax asset of £517,406 has not been recognised in the financial statements in relation to the future tax benefit on the future exercise of employee share options.
|
||||||||
|
|
|
|
|
|
||||
|
|
Opening balance |
Recognised in profit or loss |
Recognised in other comprehensive income |
Closing balance |
||||
|
|
£ |
£ |
£ |
£ |
||||
|
|
|
|
|
|
||||
|
Fixed asset timing differences
|
218,940
|
434,964
|
-
|
653,904
|
||||
|
Arising from business combinations
|
723,601
|
156,648
|
-
|
880,249
|
||||
|
Capital gains
|
31,045
|
-
|
471,901
|
502,946
|
||||
|
Short term timing differences
|
(15,851)
|
(3,515)
|
-
|
(19,366)
|
||||
|
Losses and other deductions
|
(257,251)
|
(355,832)
|
-
|
(613,083)
|
||||
|
|
700,484 |
232,265 |
471,901 |
1,404,650 |
||||
|
|
|
|
|
|
||||
|
|
Opening balance |
Recognised in profit or loss |
Acquisitions/ disposals |
Closing balance |
||||
|
|
£ |
`£ |
£ |
£ |
||||
|
|
|
|
|
|
||||
|
Fixed asset timing differences
|
159,815
|
95,691
|
(36,566)
|
218,940
|
||||
|
Arising on business combinations
|
732,942
|
(9,341)
|
-
|
723,601
|
||||
|
Capital gains
|
-
|
31,045
|
-
|
31,045
|
||||
|
Short term timing differences
|
(4,580)
|
(18,087)
|
6,816
|
(15,851)
|
||||
|
Losses and other deductions
|
(69,080)
|
(188,171)
|
-
|
(257,251)
|
||||
|
|
819,097 |
88,863) |
(29,750) |
700,484 |
||||
|
12. Earnings per share
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(i) Basic and diluted loss per share
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The total basic loss per share attributable to the ordinary equity holders of the Company was £0.001 (2020: loss of £0.020). The total diluted loss per share attributable to the ordinary equity holders of the Company was £0.001 (2020: loss of £0.018).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
13. Property, plant and equipment
|
|
|||||||||||
|
Group
|
|
|||||||||||
|
|
|
|
|
|
||||||||
|
|
Land and buildings |
Right of use assets - leasehold property |
Leasehold improvements |
Plant and machinery |
Motor vehicles |
Fixtures, fittings & computer equipment |
Right of use assets - other |
Total |
||||
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
||||
|
Cost or valuation |
|
|
|
|
|
|
|
|
||||
|
At 1 January 2020 |
3,875,000 |
1,023,297 |
8,730 |
315,157 |
649,679 |
556,741 |
837,087 |
7,265,691 |
||||
|
Additions |
- |
3,907,884 |
105,768 |
265,010 |
- |
715,486 |
1,316,215 |
6,310,363 |
||||
|
Acquisition of subsidiary |
- |
- |
- |
93,077 |
64,583 |
63,889 |
- |
221,549 |
||||
|
Disposals |
- |
(159,179) |
- |
(7,997) |
(101,811) |
(16,389) |
(371,690) |
(657,066) |
||||
|
Disposals on restructure |
- |
- |
- |
(57,204) |
- |
(193,090) |
- |
(250,294) |
||||
|
Revaluation / (impairment) |
175,000 |
(91,733) |
- |
- |
- |
- |
- |
83,267 |
||||
|
Foreign exchange movements |
- |
- |
- |
4,087 |
883 |
1,819 |
- |
6,789 |
||||
|
At 31 December 2020 |
4,050,000 |
4,680,269 |
114,498 |
612,130 |
613,334 |
1,128,456 |
1,781,612 |
12,980,299 |
||||
|
Additions |
- |
4,888,501 |
184,221 |
876,927 |
49,545 |
482,576 |
2,390,834 |
8,872,604 |
||||
|
Disposals |
- |
(451,832) |
- |
- |
(3,943) |
(2,250) |
(301,449) |
(759,474) |
||||
|
Transfers between classes |
- |
- |
- |
444,955 |
- |
(444,955) |
- |
- |
||||
|
Revaluation / (impairment) |
1,735,000 |
(140,249) |
- |
- |
- |
- |
- |
1,594,751 |
||||
|
Foreign exchange movements |
- |
- |
- |
(5,276) |
(1,140) |
(2,420) |
- |
(8,836) |
||||
|
At 31 December 2021 |
5,785,000 |
8,976,689 |
298,719 |
1,928,736 |
657,796 |
1,161,407 |
3,870,997 |
22,679,344 |
||||
|
|
Land and buildings |
Right of use assets - leasehold property |
Leasehold improvements |
Plant and machinery |
Motor vehicles |
Fixtures, fittings & computer equipment |
Right of use assets - other |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
- |
402,919 |
437 |
40,981 |
141,507 |
77,064 |
242,037 |
904,945 |
|
Charge for the year |
63,757 |
- |
1,021 |
90,996 |
183,792 |
150,967 |
- |
490,533 |
|
Charge for right‑of‑use assets |
- |
537,518 |
- |
- |
- |
- |
417,860 |
955,378 |
|
Disposals |
- |
(159,179) |
- |
(1,253) |
(70,084) |
(3,863) |
(252,076) |
(486,455) |
|
Disposals on restructure |
- |
- |
- |
(22,925) |
- |
(58,833) |
- |
(81,758) |
|
On revalued assets |
(63,757) |
- |
- |
- |
- |
- |
- |
(63,757) |
|
Exchange adjustments |
- |
- |
- |
2,610 |
883 |
1,321 |
- |
4,814 |
|
At 31 December 2020 |
- |
781,258 |
1,458 |
110,409 |
256,098 |
166,656 |
407,821 |
1,723,700 |
|
Charge for the year |
67,257 |
- |
21,522 |
142,324 |
157,249 |
162,772 |
- |
551,124 |
|
Charge for right‑of‑use assets |
- |
667,879 |
- |
- |
- |
- |
615,427 |
1,283,306 |
|
Disposals |
- |
(451,832) |
- |
- |
(1,768) |
(263) |
(76,937) |
(530,800) |
|
Impairment charge |
- |
- |
7,739 |
- |
- |
- |
- |
7,739 |
|
On revalued assets |
(67,257) |
- |
- |
- |
- |
- |
- |
(67,257) |
|
Exchange adjustments |
- |
- |
- |
(3,998) |
(1,140) |
(2,051) |
- |
(7,189) |
|
At 31 December 2021 |
- |
997,305 |
30,719 |
248,735 |
410,439 |
327,114 |
946,311 |
2,960,623 |
|
Net book value |
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
3,875,000 |
620,378 |
8,293 |
274,176 |
508,172 |
479,677 |
595,050 |
6,360,746 |
|
At 31 December 2020 |
4,050,000 |
3,899,011 |
113,040 |
501,721 |
357,236 |
961,800 |
1,373,791 |
11,256,599 |
|
At 31 December 2021 |
5,785,000 |
7,979,384 |
268,000 |
1,680,001 |
247,357 |
834,293 |
2,924,686 |
19,718,721 |
|
|
|
13.1. Assets held under leases
|
||
|
The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated Statement of Financial Position is as follows:
|
||
|
|
31 December 2021 |
31 December 2020 |
|
|
£ |
£ |
|
|
|
|
|
Property, plant and equipment owned |
8,814,651 |
5,983,797 |
|
Right‑of‑use assets |
10,904,070 |
5,272,802 |
|
|
19,718,721 |
11,256,599 |
|
Information about right‑of‑use assets is summarised below:
Net book value
|
||||
|
|
|
|
31 December 2021 |
31 December 2020 |
|
|
|
|
£ |
£ |
|
Property |
7,979,384 |
3,899,011 |
||
|
Motor vehicles & plant and machinery |
2,924,686 |
1,373,791 |
||
|
|
10,904,070 |
5,272,802 |
||
|
Depreciation charge for the year ended
|
||||
|
|
|
|
31 December 2021 |
31 December 2020 |
|
|
|
|
£ |
£ |
|
Property |
667,879 |
537,518 |
||
|
Motor vehicles & plant and machinery |
615,427 |
417,860 |
||
|
|
1,283,306 |
955,378 |
||
|
13.2 Fair value measurement and Impairment
|
Fair value measurement
Included in land and buildings is land with a cost of £687,167 (2020: £687,167) which is not depreciated.
The Group's freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value measurement of the Group's freehold land and buildings as at 31 March 2022, which the directors do not believe is materially different to the valuation at year end, was performed by Savills (UK) Limited, independent valuers not related to the Group. Savills (UK) Limited are real estate advisors and have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations. The valuation report has been prepared in accordance with Royal Institution of Chartered Surveyors ("RICS") Valuation ‑ Global Standards (incorporating the IVSC International Valuation Standards) issued November 2021 and effective from 31 January 2022 together, where applicable, with the UK National Supplement effective from 14 January 2019, together the "Red Book". Property valuations are complex, require a degree of judgement and are based on data that may or may not be publicly available. Valuation of investment property and the respective inputs have been classified as level 3 inputs as defined by IFRS 13 Fair Value Measurement. Level 3 means that the valuation model cannot rely on inputs that are directly available from an active market; however there are related inputs from recent property sales that can be used as a basis.
In establishing fair value, the most significant unobservable input is considered to be the appropriate yield to apply to the rental income. This is based on a number of factors including financial covenant strength of the tenant, location, marketability of the unit if it were to become vacant, quality of the property and its scope for potential alternative uses.
The yield applied in the valuation is 6.6%. Assuming all else stayed the same; a decrease of 1% in the yield would result in an increase in fair value of £1,032,000. An increase of 1% in the yield would result in a decrease in fair value of £760,000.
The revaluation of land and buildings for 2021 of £1,802,257 has been recognised within Other Comprehensive Income.
Impairment losses recognised in the year
During the prior year, the Group restructured the business to operate from one site. This resulted in an impairment of leasehold property right of use assets of £91,733.
During the current year the Company moved the location of its head office to a new site. This resulted in an impairment of the leasehold right of use asset of £140,249.
|
13.3 Assets pledged as security
|
There is a floating charge against the assets of the subsidiary Likewise Floors Limited, from NatWest Bank PLC.
There is a fixed charge over the freehold land and buildings held by the Group in respect of the bank loans in place for the Group.
Floating charges previously held against assets of William Armes Limited have been supported by cross guarantees from Likewise Group Plc following the transfer of trade and assets from William Armes Limited to Likewise Floors Limited. These charges are in respect of bank loans and invoice financing arrangements of the Group.
13.4 Capital commitments
During 2021, the Group entered into contracts to purchase property, plant and equipment for £470,423 in respect of assets acquired for the new Likewise Midlands facility. These commitments are expected to be settled in 2022.
|
Company
|
|
|||||||
|
|
|
|
|
|
||||
|
|
Right of use assets - leasehold property |
Leasehold improvements |
Fixtures, fittings & computer equipment |
Total |
||||
|
|
£ |
£ |
£ |
£ |
||||
|
Cost or valuation |
|
|
|
|
||||
|
At 1 January 2020 |
144,659 |
8,730 |
25,066 |
178,455 |
||||
|
Additions |
62,012 |
1,489 |
544 |
64,045 |
||||
|
At 31 December 2020 |
206,671 |
10,219 |
25,610 |
242,500 |
||||
|
Additions |
- |
- |
16,689 |
16,689 |
||||
|
Impairments |
(140,249) |
- |
- |
(140,249) |
||||
|
At 31 December 2021 |
66,422 |
10,219 |
42,299 |
118,940 |
||||
|
|
Right of use assets ‑ leasehold property |
Leasehold improvements |
Fixtures, fittings & computer equipment |
Total |
|
|
|
£ |
£ |
£ |
£ |
|
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
At 1 January 2020 |
18,152 |
437 |
2,177 |
20,766 |
|
|
Charge for the year |
- |
1,021 |
4,758 |
5,779 |
|
|
Charge for right‑of‑use assets |
22,770 |
- |
- |
22,770 |
|
|
At 31 December 2020 |
40,922 |
1,458 |
6,935 |
49,315 |
|
|
Charge for the year |
- |
1,022 |
6,560 |
7,582 |
|
|
Charge for right‑of‑use assets |
25,500 |
- |
- |
25,500 |
|
|
Impairment charge |
- |
7,739 |
- |
7,739 |
|
|
At 31 December 2021 |
66,422 |
10,219 |
13,495 |
90,136 |
|
|
Net book value |
|
|
|
|
|
|
At 1 January 2020 |
126,507 |
8,293 |
22,889 |
157,689 |
|
|
At 31 December 2020 |
165,749 |
8,761 |
18,675 |
193,185 |
|
|
At 31 December 2021 |
- |
- |
28,804 |
28,804 |
|
|
13.5 Assets held under leases
|
|||
|
The net book value of owned and leased assets included as "Property, plant and equipment" in the Company Statement of Financial Position is as follows:
|
|||
|
|
31 December 2021 |
31 December 2020 |
|
|
|
£ |
£ |
|
|
Property, plant and equipment owned |
28,804 |
27,436 |
|
|
Right‑of‑use assets |
- |
165,74 |
|
|
|
28,804 |
193,185 |
|
During the current year the Company moved the location of its head office to a new site. This resulted in an impairment of the leasehold right of use asset of £140,249.
|
14. Intangible assets
|
|||||||
|
Group
|
|||||||
|
|
|
|
|
||||
|
|
Licences |
Likewise Floors Customer base |
Likewise Floors Brandname |
Total |
|||
|
|
£ |
£ |
£ |
£ |
|||
|
Cost |
|
|
|
|
|||
|
At 1 January 2020 |
2,923 |
2,122,349 |
2,189,075 |
4,314,347 |
|||
|
Disposals |
(2,923) |
- |
- |
(2,923) |
|||
|
At 31 December 2020 |
- |
2,122,349 |
2,189,075 |
4,311,424 |
|||
|
At 31 December 2021 |
- |
2,122,349 |
2,189,075 |
4,311,424 |
|||
|
|
Licences |
Likewise Floors Customer base |
Likewise Floors Brandname |
Total |
|
|
£ |
£ |
£ |
£ |
|
Accumulated amortisation and impairment |
|
|
|
|
|
At 1 January 2020 |
360 |
106,117 |
109,454 |
215,931 |
|
Charge for the year |
- |
141,490 |
145,938 |
287,428 |
|
Disposals |
(360) |
- |
- |
(360) |
|
At 31 December 2020 |
- |
247,607 |
255,392 |
502,999 |
|
Charge for the year |
- |
141,490 |
145,938 |
287,428 |
|
At 31 December 2021 |
- |
389,097 |
401,330 |
790,427 |
|
Net book value |
|
|
|
|
|
At 1 January 2020 |
2,563 |
2,016,232 |
2,079,621 |
4,098,416 |
|
At 31 December 2020 |
- |
1,874,742 |
1,933,683 |
3,808,425 |
|
At 31 December 2021 |
- |
1,733,252 |
1,787,745 |
3,520,997 |
The Company held no other intangible assets in any period.
|
|
||||||
|
15. Goodwill
|
|
|||||
|
Group
|
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
£ |
£ |
|
|
Cost |
4,216,728 |
4,216,728 |
|
|||
|
|
4,216,728 |
4,216,728 |
|
|||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
Cost |
|
|
|||
|
At 1 January |
4,216,728 |
4,028,287 |
|||
|
On acquisition of subsidiaries |
- |
188,441 |
|||
|
At 31 December |
4,216,728 |
4,216,728 |
|||
|
Accumulated impairment |
|
|
|||
|
At 31 December |
- |
- |
|||
|
15.1 Allocation of goodwill to cash generating units
|
|||||
|
The carrying amount of goodwill has all been allocated to the Group's primary activity of wholesale distribution and has been allocated to trading brands as follows:
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
|
|
|
|||
|
Likewise Floors Limited (formerly Heatseam Limited) and its subsidiaries |
3,253,210 |
3,253,210 |
|||
|
Lewis Abbott Limited |
467,847 |
467,847 |
|||
|
H&V Carpets BVBA |
307,230 |
307,230 |
|||
|
A. & A. Carpets Limited |
188,441 |
188,441 |
|||
|
|
4,216,728 |
4,216,728 |
|||
|
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
|
Likewise Floors Limited and its subsidiaries
The break even point of goodwill for Likewise Floors Limited is at a growth level of ‑26.62% with terminal growth factor of 2%.
Lewis Abbott Limited
The break even point of goodwill for Lewis Abbott Limited is at a growth level of ‑14.87% with terminal growth factor of 2%.
H&V Carpets BVBA
The break even point of goodwill for H&V Carpets BVBA is at a growth level of 24.77% with terminal growth factor of 2%.
A. & A. Carpets Limited
The break even point of goodwill for A. & A. Carpets Limited is at a growth level of ‑81% with terminal growth factor of 2%.
|
16. Subsidiaries
|
|
||||||||||||||||||
|
Details of the Group's subsidiaries at the end of the reporting period are as follows:
|
|
||||||||||||||||||
|
Name of subsidiary |
|
Principal activity |
Place of incorporation and operation |
Proportion of ownership interest and voting power held by the Group (%) |
|
||||||||||||||
|
|
|
|
|
|
2021 |
2020 |
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
|
1) Likewise Trading Limited |
Wholesale distribution of floor coverings and associated products |
Great Britain |
100 |
100 |
|
||||||||||||||
|
2) William Armes Holdings Limited |
Holding company |
Great Britain |
100 |
100 |
|
||||||||||||||
|
3) William Armes Limited (100% subsidiary of William Armes Holdings Limited) |
Wholesale distribution of floor coverings and associated products |
Great Britain |
100 |
100 |
|
||||||||||||||
|
4) Lewis Abbott Limited (100% subsidiary of Likewise Trading Limited) |
Wholesale distribution of floor coverings and associated products |
Great Britain |
100 |
100 |
|
||||||||||||||
|
5) Likewise Floors Limited |
Wholesale distribution of floor coverings and associated products |
Great Britain |
100 |
100 |
|
||||||||||||||
|
6) Factory Flooring Outlet Ltd (100% subsidiary of Likewise Floors Ltd) |
Dormant company
|
Great Britain |
100 |
100 |
|
||||||||||||||
|
7) H&V Carpets BVBA |
Wholesale distribution of floor coverings and associated products |
Belgium |
100 |
100 |
|
||||||||||||||
|
8) A&A Carpets Limited |
Wholesale distribution of floor coverings and associated product |
Great Britain |
100 |
100 |
|
||||||||||||||
|
9) Likewise Limited |
Dormant company |
Great Britain |
100 |
- |
|
||||||||||||||
|
On 31 December 2021, the trade and assets of A. & A. Carpets Limited, William Armes Limited and Lewis Abbott Limited were transferred to Likewise Floors Limited (formerly Heatseam Limited).
|
|
||||||||||||||||||
|
Company ‑ Shares in group undertakings
|
|||||||||||||||||||
|
|
|
|
2021 |
2020 |
|||||||||||||||
|
|
|
|
£ |
£ |
|||||||||||||||
|
At 1 January |
|
12,555,774 |
11,626,451 |
||||||||||||||||
|
Additions |
|
- |
891,770 |
||||||||||||||||
|
Impairment following transfer of trade of subsidiaries |
|
(891,770) |
- |
||||||||||||||||
|
Share options |
|
74,827 |
37,553 |
||||||||||||||||
|
|
|
11,738,831 |
12,555,774 |
||||||||||||||||
|
The Group considers impairment of its subsidiaries annually, this is assessed in the context of the Group's structure, and if appropriate an impairment provision is made.
|
|||||||||||||||||||
|
17. Inventories
|
|||||||||||||||||||
|
Group
|
|||||||||||||||||||
|
|
|
|
|
2021 |
2020 |
||||||||||||||
|
|
|
|
|
£ |
£ |
||||||||||||||
|
|
|
|
|||||||||||||||||
|
Finished goods and goods for resale |
10,256,740 |
7,555,806 |
|||||||||||||||||
|
|
10,256,740 |
7,555,806 |
|||||||||||||||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
|
|
|
|||
|
Amounts of inventories recognised as an expense during the year |
42,350,337 |
34,992,370 |
|||
|
Amounts of inventories impaired during the year |
128,875 |
67,381 |
|||
|
18. Trade and other receivables
|
||
|
Group |
||
|
|
2021 |
2020 |
|
|
£ |
£ |
|
|
|
|
|
Trade receivables |
7,639,636 |
6,626,374 |
|
Less: provision for impairment of trade receivables |
(117,799) |
(118,137) |
|
Trade receivables ‑ net |
7,521,837 |
6,508,237 |
|
Prepayments and accrued income |
893,103 |
635,700 |
|
Other receivables |
1,496,983 |
322,221 |
|
Total trade and other receivables |
9,911,923 |
7,466,158 |
|
Less: current portion ‑ trade receivables |
(7,521,837) |
(6,508,237) |
|
Less: current portion ‑ prepayments and accrued income |
(893,103) |
(635,700) |
|
Less: current portion ‑ other receivables |
(1,360,135) |
(322,221) |
|
Total current portion |
(9,775,075) |
(7,466,158) |
|
Total non‑current portion |
136,848 |
- |
|
Company
|
||
|
|
2021 |
2020 |
|
|
£ |
£ |
|
|
|
|
|
Receivables from related parties |
6,230,742 |
5,263,190 |
|
Total financial assets other than cash and cash equivalents classified as loans and receivables |
6,230,742 |
5,263,190 |
|
Prepayments and accrued income |
102,376 |
186,476 |
|
Other receivables |
11,475 |
100 |
|
Total trade and other receivables |
6,344,593 |
5,449,766 |
|
Total current portion |
(6,344,593) |
(5,449,766) |
|
All of the above amounts are financial assets of the Group and Parent Company except certain prepayments.
|
||
|
|
Group |
Group |
|
|
2021 |
2020 |
|
|
£ |
£ |
|
|
|
|
|
Not more than 30 days |
4,118,045 |
3,204,227 |
|
More than 30 days but not more than 60 days |
2,323,728 |
1,796,272 |
|
More than 60 days but not more than 90 days |
560,072 |
476,580 |
|
More than 90 days but not more than 120 days |
176,091 |
191,260 |
|
More than 120 days |
461,700 |
958,035 |
|
Loss allowance |
(117,799) |
(118,137) |
|
|
7,521,837 |
6,508,237 |
|
|
|||||
|
|
|
|
|
2021 |
ECL |
|
|
|
|
|
£ |
|
|
|
|
|
|||
|
More than 90 days but not more than 120 days ‑ 5% (adjusted ‑ see below) |
127,757 |
6,388 |
|||
|
More than 120 days ‑ 50% (adjusted for payment plans ‑ see below) |
190,966 |
95,483 |
|||
|
Additional loss allowance |
- |
15,928 |
|||
|
|
318,723 |
117,799 |
|||
|
The debtors balance to which the ECL has been applied has been adjusted where there are specific payment plans in place.
|
||||
|
|
|
|
|
2021 |
|
|
|
|
|
£ |
|
Reconciliation of ECL allowance balance |
|
|||
|
Balance at 1 January |
118,137 |
|||
|
ECL allowance charged to profit or loss |
42,241 |
|||
|
Other movements |
(42,579) |
|||
|
|
117,799 |
|||
|
The carrying amounts of the trade receivables include receivables which are subject to a factoring agreement. Under this arrangement, the subsidiary trading companies have transferred the relevant receivables to the factor in exchange for cash and are prevented from selling or pledging the receivables. However, the subsidiaries retain the late payment and credit risk. The Group therefore continues to recognise the transferred assets in their entirety in its Consolidated Statement of Financial Position. The amount repayable under the factoring agreement is presented as secured borrowing. The Group considers the held to collect business model to remain appropriate for these receivables and hence continues measuring them at amortised cost.
|
|||||
|
The relevant carrying amounts are:
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
|
|
|
|||
|
Transferred receivables |
4,295,893 |
1,434,634 |
|||
|
Associated secured borrowings |
(2,359,543) |
(1,093,264) |
|||
|
19. Cash and cash equivalents
|
||||
|
|
Group |
Group |
Company |
Company |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
Cash at bank and in hand |
8,447,550 |
2,820,895 |
7,077,876 |
59,447 |
|
|
8,447,550 |
2,820,895 |
7,077,876 |
59,447 |
|
20 Trade and other payables
|
|
||||||||
|
|
|
||||||||
|
Group
|
|
||||||||
|
|
2021 |
2020 |
|
||||||
|
|
£ |
£ |
|
||||||
|
|
|
|
|
||||||
|
Trade payables |
13,315,768 |
10,599,998 |
|
||||||
|
Other payables |
238,210 |
144,716 |
|
||||||
|
Accruals |
1,398,933 |
1,169,781 |
|
||||||
|
Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost |
14,952,911 |
11,914,495 |
|
||||||
|
Other payables ‑ tax and social security payments |
849,123 |
2,085,490 |
|
||||||
|
Deferred consideration on acquisition of subsidiaries |
- |
1,480,000 |
|
||||||
|
Total trade and other payables |
15,802,034 |
15,479,985 |
|
||||||
|
Less: current portion ‑ trade payables |
(13,315,768) |
(10,599,998) |
|
||||||
|
Less: current portion ‑ other payables |
(1,087,333) |
(2,230,206) |
|
||||||
|
Less: current portion ‑ accruals |
(1,398,933) |
(1,169,781) |
|
||||||
|
Less: current portion ‑ deferred consideration |
- |
(1,480,000) |
|
||||||
|
Total current portion |
(15,802,034) |
(15,479,985) |
|
||||||
|
Total non‑current position |
- |
- |
|
||||||
|
|
|||||||||
|
Company
|
|
||||||||
|
|
2021 |
2020 |
|
||||||
|
|
£ |
£ |
|
||||||
|
Trade payables |
126,363 |
12,363 |
|
||||||
|
Payables to related parties |
1,699,865 |
2,379,925 |
|
||||||
|
Other payables |
7,875 |
4,570 |
|
||||||
|
Accruals |
140,456 |
175,781 |
|
||||||
|
Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost |
1,974,559 |
2,572,639 |
|
||||||
|
Other payables ‑ tax and social security payments |
58,005 |
59,102 |
|
||||||
|
Deferred consideration on acquisition of subsidiaries |
- |
1,480,000 |
|
||||||
|
Total trade and other payables |
2,032,564 |
4,111,741 |
|
||||||
|
Less: current portion ‑ trade payables |
(126,363) |
(12,363) |
|
||||||
|
Less: current portion ‑ payables to related parties |
(1,699,865) |
(2,379,925) |
|
||||||
|
Less: current portion ‑ other payables |
(65,880) |
(63,672) |
|
||||||
|
Less: current portion ‑ accruals |
(140,456) |
(175,781) |
|
||||||
|
Less: current portion ‑ deferred consideration |
- |
(1,480,000) |
|
||||||
|
Total current portion |
(2,032,564) |
(4,111,741) |
|
||||||
|
|
Total non‑current position |
- |
- |
||||||
|
|
Trade payables and accruals principally comprise amounts outstanding in relation to trade purchases and ongoing costs. Trade payables are unsecured and the Group has financial risk management procedures in place to ensure that all payables are paid within pre‑agreed credit terms.
|
|
||
|
|
|
|||
|
21 Loans and borrowings
|
||||
|
Group |
||||
|
|
2021 |
2020 |
||
|
|
£ |
£ |
||
|
Non‑current |
|
|
||
|
Bank loans ‑ secured |
1,640,563 |
1,779,668 |
||
|
Lease liabilities |
10,488,881 |
4,969,987 |
||
|
|
12,129,444 |
6,749,655 |
||
|
Current |
|
|
||
|
Bank loans and invoice discounting facility |
2,498,234 |
1,192,212 |
||
|
Lease liabilities |
1,681,658 |
1,032,354 |
||
|
|
4,179,892 |
2,224,566 |
||
|
Total loans and borrowings |
16,309,336 |
8,974,221 |
||
|
Company |
||
|
|
2021 |
2020 |
|
|
£ |
£ |
|
Non‑current |
|
|
|
Bank loans ‑ secured |
1,640,563 |
1,779,668 |
|
Lease liabilities |
- |
163,840 |
|
|
1,640,563 |
1,943,508 |
|
Current |
|
|
|
Bank loans ‑ secured |
138,691 |
98,948 |
|
Lease liabilities |
- |
28,161 |
|
|
138,691 |
127,109 |
|
Total loans and borrowings |
1,779,254 |
2,070,617 |
|
The Directors consider that the carrying amount of the invoice discounting facility and bank loan approximates their fair value.
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
Amounts repayable under bank loans ‑ Group and Company |
|
|
|||
|
Within one year |
138,691 |
98,948 |
|||
|
In the second to fifth year inclusive |
597,494 |
580,147 |
|||
|
Beyond five years |
1,043,069 |
1,199,521 |
|||
|
|
1,779,254 |
1,878,616 |
|||
|
The invoice discounting facility is held for Likewise Floors Limited and has a fixed service charge of £18,000 per annum. |
|
|
|
|||||
|
22. Leases
|
||||||
|
Group
|
||||||
|
(i) Leases as a lessee
|
||||||
|
The Group's leases include leases for buildings, plant and motor vehicles. The average lease term is 5 years for buildings and 4 years for other fixed assets.
|
||||||
|
Lease liabilities are due as follows:
|
||||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
|
£ |
£ |
|
|
Contractual undiscounted cash flows due |
|
|
||||
|
Not later than one year |
1,814,829 |
1,069,331 |
||||
|
Between one year and five years |
5,947,403 |
3,629,281 |
||||
|
Later than five years |
6,067,895 |
2,254,306 |
||||
|
|
13,830,127 |
6,952,918 |
||||
|
|
|
|
||||
|
Lease liabilities included in the Consolidated Statement of Financial Position at 31 December |
12,170,539 |
6,002,341 |
||||
|
|
|
|
||||
|
Non‑current |
10,488,881 |
4,969,987 |
||||
|
Current |
1,681,658 |
1,032,354 |
||||
|
23. Financial instruments
|
||||
|
Classification of financial instruments
|
||||
|
|
Group |
Group |
Company |
Company |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
£ |
£ |
£ |
£ |
|
Financial assets at amortised cost |
|
|
|
|
|
Trade receivables |
7,521,837 |
6,508,237 |
- |
- |
|
Amounts owed by group undertakings |
- |
- |
6,230,742 |
5,263,190 |
|
Other receivables |
1,496,983 |
322,221 |
11,475 |
100 |
|
Cash and cash equivalents |
8,447,550 |
2,820,895 |
7,077,876 |
59,447 |
|
|
17,466,370 |
9,651,353 |
13,320,093 |
5,322,737 |
|
All of the above financial assets' carrying values are approximate to their fair values, as at each reporting date disclosed.
|
||||
|
|
Group |
Group |
Company |
Company |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
£ |
£ |
£ |
£ |
|
Non current financial liabilities at amortised cost |
|
|
|
|
|
Bank loans |
1,640,563 |
1,779,668 |
1,640,563 |
1,779,668 |
|
|
1,640,563 |
1,779,668 |
1,640,563 |
1,779,668 |
|
|
Group |
Group |
Company |
Company |
|
|
2021 |
2020 |
2021 |
2020 |
|
|
£ |
£ |
£ |
£ |
|
Current financial liabilities at amortised cost |
|
|
|
|
|
Trade payables |
13,315,768 |
10,599,998 |
126,363 |
12,363 |
|
Amounts owed to group undertakings |
- |
- |
1,699,865 |
2,379,925 |
|
Deferred consideration on acquisition of subsidiaries |
- |
1,480,000 |
- |
1,480,000 |
|
Other payables |
238,210 |
144,716 |
7,875 |
4,570 |
|
Accruals |
1,398,933 |
1,169,781 |
140,456 |
175,781 |
|
Invoice discounting facility |
2,359,543 |
1,093,264 |
- |
- |
|
Bank loans ‑ current |
138,691 |
98,948 |
138,691 |
98,948 |
|
|
17,451,145 |
14,586,707 |
2,113,250 |
4,151,587 |
|
All of the above financial liabilities' carrying values are considered by management to be approximate to their fair values, as at each reporting date disclosed.
|
||||||
|
24. Provisions
|
||||||
|
Group
|
||||||
|
|
|
|
||||
|
|
Dilapidation provision |
Onerous lease provision |
Total |
|||
|
|
£ |
£ |
£ |
|||
|
|
|
|
|
|||
|
At 1 January 2021 |
382,722 |
- |
382,722 |
|||
|
Charged to profit or loss |
- |
88,000 |
88,000 |
|||
|
Utilised during the year |
(268,046) |
- |
(268,046) |
|||
|
At 31 December 2021 |
114,676 |
88,000 |
202,676 |
|||
|
Company |
|||
|
|
|
|
|
|
|
Onerous lease provision |
||
|
|
£ |
||
|
|
|
||
|
Charged to profit or loss |
88,000 |
||
|
At 31 December 2021 |
88,000 |
||
|
25. Financial instrument risk exposure and management
|
|
|
|
25.1 Financial risk management objectives
The Group's operations expose it to degrees of financial risk that include liquidity risk, credit risk, interest rate risk, and foreign currency risk.
This note describes the Group's objectives, policies and process for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented in the notes above.
|
||
|
25.2 Foreign currency risk
|
||
|
Most of the Group's transactions are carried out in GBP. Exposures to foreign currency exchange rates arise from the Group's overseas sales and purchases, which are denominated in a number of currencies, primarily EUR.
The Group assesses exposure and takes out forward currency contracts to mitigate this foreign exchange risk. As at the 31 December 2021, the value of forward contracts held by the subsidiary companies were as follows:
|
||
|
William Armes Limited held forward Euro contracts totalling 206,910 Euros.
|
||
|
25.3 Interest rate risk
|
|
|
The Group has secured debt consisting of an invoice discounting facility and bank loan.
The interest on the bank loan and discounting facility are at floating rates, however interest rate risk is considered to be limited due to the low current interest rates and economic climate. The Directors have performed sensitivity analysis which shows the impact on cash flows for the coming year would be less than £200,000 even if interest rates were to rise by 5% which is considered by the Directors to be highly unlikely.
The Group's only other exposure to interest rate risk is the interest received on the cash held on deposit, which is immaterial.
|
25.4 Credit risk
|
The Group's credit risk is primarily attributable to its cash balances and trade receivables.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counter party or any group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various industries and geographical areas. Based on historical information about customer default rates management consider the credit quality of trade receivables that are not past due or impaired to be good.
The ageing profile of the trade receivables balance can be seen in note 18 above.
The Group's total credit risk amounts to the total of the sum of the receivables and cash and cash equivalents. At the 2021 reporting date this amounts to £17,466,370 (2020: £9,651,353).
|
|
25.5 Liquidity risk
|
|||||||
|
|
Liquidity and interest risk tables
Prudent liquidity risk management includes maintaining sufficient cash balances to ensure the Group can meet liabilities as they fall due, and ensuring adequate working capital using invoice discounting arrangements.
|
|||||||
|
|
|
Carrying amount |
Total |
1 ‑ 3 months |
3 ‑ 12 months |
1 ‑ 2 years |
2 ‑ 5 years |
More than 5 years |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
31 December 2021
|
|
|
|
|
|
|
|
|
|
Trade payables |
13,315,768 |
13,315,768 |
13,315,768 |
- |
- |
- |
- |
|
|
Other taxation and social security |
849,123 |
849,123 |
849,123 |
- |
- |
- |
- |
|
|
Other payables |
238,210 |
238,210 |
238,210 |
- |
- |
- |
- |
|
|
Accruals |
1,398,933 |
1,398,933 |
1,398,933 |
- |
- |
- |
- |
|
|
Lease liabilities |
12,170,539 |
13,830,127 |
453,707 |
1,361,122 |
1,315,791 |
4,631,612 |
6,067,895 |
|
|
Invoice discounting facility |
2,359,543 |
2,359,543 |
2,359,543 |
- |
- |
- |
- |
|
|
Bank loans |
1,779,254 |
2,086,831 |
47,332 |
141,994 |
189,326 |
567,978 |
1,140,201 |
|
|
|
32,111,370 |
34,078,535 |
18,662,616 |
1,503,116 |
1,505,117 |
5,199,590 |
7,208,096 |
|
|
|
Carrying amount |
Total |
1 ‑ 3 months |
3 ‑ 12 months |
1 ‑ 2 years |
2 ‑ 5 years |
More than 5 years |
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
31 December 2020
|
|
|
|
|
|
|
|
|
|
Trade payables |
10,599,998 |
10,599,998 |
10,599,998 |
- |
- |
- |
- |
|
|
Other taxation and social security |
2,085,490 |
2,085,490 |
2,085,490 |
- |
- |
- |
- |
|
|
Deferred consideration |
1,480,000 |
1,480,000 |
- |
1,480,000 |
- |
- |
- |
|
|
Other payables |
144,716 |
144,716 |
144,716 |
- |
- |
- |
- |
|
|
Accruals |
1,169,781 |
1,169,781 |
1,169,781 |
- |
- |
- |
- |
|
|
Lease liabilities |
6,002,341 |
6,952,918 |
267,333 |
801,998 |
1,150,287 |
2,478,994 |
2,254,306 |
|
|
Invoice discounting facility |
1,093,264 |
1,093,264 |
1,093,264 |
- |
- |
- |
- |
|
|
Bank loans |
1,878,616 |
2,240,259 |
38,357 |
115,072 |
189,326 |
567,978 |
1,329,526 |
|
|
|
24,454,206 |
25,766,426 |
15,398,939 |
2,397,070 |
1,339,613 |
3,046,972 |
3,583,832 |
|
26. Capital management
|
|||||
|
The Group's capital management objectives are:
|
|||||
|
|
|
|
|
2021 |
2020 |
|
|
|
|
|
£ |
£ |
|
|
|
|
|||
|
Equity |
22,353,963 |
11,587,199 |
|||
|
Borrowings |
16,309,336 |
8,974,221 |
|||
|
Cash and cash equivalents |
(8,447,550) |
(2,820,895) |
|||
|
|
30,215,749 |
17,740,525 |
|||
|
The Board of Directors monitors the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary by issuing new shares or adjusting the level of debt. The Group is not subject to any externally imposed capital requirements.
|
||
|
27. Share capital
|
||
|
Consolidated and Company
|
||
|
Authorised
|
|
|
|
|
2021 |
2021 |
|
|
Number |
£ |
|
|
|
|
|
Shares treated as equity |
|
|
|
Ordinary shares of £0.01 each
|
192,374,194
|
1,923,742
|
|
|
192,374,194 |
1,923,742 |
|
|
|
|
|
Issued and fully paid |
|
|
|
|
2021 |
2021 |
|
|
Number |
£ |
|
|
|
|
|
Ordinary shares of £0.01 each
|
|
|
|
At 1 January
|
152,341,994
|
1,523,420
|
|
Shares issued
|
40,032,200
|
400,322
|
|
At 31 December |
192,374,194 |
1,923,742 |
|
The Company has one class of ordinary share which carry no right to fixed income.
|
|
|
28. Reserves
|
|
Share capital
This represents the nominal value of shares that have been issued.
Share premium
This reflects proceeds generated on issue of shares in excess of their nominal value and is a non‑distributable reserve.
Revaluation reserve
This is used to record increases in the fair value of fixed assets and decreases to the extent that the decrease relates to a previous increase on the same asset. The revaluation reserve is a non‑distributable reserve. The excess depreciation on revalued assets in comparison to historical cost depreciation is transferred from the revaluation reserve to retained earnings.
Foreign exchange reserve
This reflects the exchange differences on the translation of the foreign subsidiary.
Retained earnings
This includes all current and prior period gains and losses.
Share option reserve
This represents the cumulative fair value of options granted.
Warrant reserve
This represents the cumulative fair value of warrants granted.
|
29. Warrants over ordinary shares
|
On 9 January 2019, the Company issued warrants over 1,800,000 shares as part of the IPO at a price of £0.10 per share.
On 1 May 2019, the Company issued warrants over 1,000,000 shares as part of the acquisition of H&V Carpets BVBA at a price of £0.30 per share.
Warrants are exercisable at any date in the ten years following the date of grant and none had been exercised as at 31 December 2021.
Warrants were valued using the Black‑Scholes model. The inputs to the model were the option price and share price at date of grant, expected date of exercise, expected volatility (20%), expected dividend rate (0%) and risk free rate of return (4%). The fair value of the warrants at the date of grant was considered to be £128,170.
|
|
30. Analysis of amounts recognised in other comprehensive income
|
||||
|
|
|
Note |
Revaluation reserve |
Foreign exchange reserve |
Retained earnings |
|
|
|
|
£ |
£ |
£ |
|
|
Year to 31 December 2021
|
|
|
|
|
|
|
Property revaluation |
|
1,330,356 |
- |
- |
|
|
Actuarial losses on pension |
31 |
- |
- |
(20,000) |
|
|
Translation in relation to foreign subsidiary |
|
- |
(17,222) |
- |
|
|
Transfer to/from retained earnings |
|
(19,000) |
- |
19,000 |
|
|
|
|
1,311,356 |
(17,222) |
(1,000) |
|
|
Note |
Revaluation reserve |
Foreign exchange reserve |
Retained earnings |
|
|
|
£ |
£ |
£ |
|
Year to 31 December 2020
|
|
|
|
|
|
Property revaluation |
|
238,757 |
- |
- |
|
Actuarial losses on pension |
31 |
- |
- |
(20,000) |
|
Translation in relation to foreign subsidiary |
|
- |
(39,403) |
- |
|
Other adjustments |
|
- |
- |
(370) |
|
Transfer to/from retained earnings |
|
(15,500) |
- |
15,500 |
|
|
|
223,257 |
(39,403) |
(4,870) |
|
Retirement plans
|
|
|
Defined contribution scheme
|
|
|
(i) Defined benefit scheme characteristics and funding
|
|
William Armes Limited, a subsidiary of the Group since 9 January 2018, operates a pension scheme providing benefits based on final pensionable pay. The Scheme is closed to new members and is closed to future accrual. For pensions earned after 5 April 1997 and for Guaranteed Minimum Pensions earned between 6 April 1998 and 5 April 1997, increases in payment will be in line with CPI rather than RPI. Revaluations of pensions in deferment are linked to RPI. The scheme has been transferred to Likewise Floors Limited as part of the transfer of trade and assets.
The assets of the Scheme are held separately from those of the Group in trustee‑administered funds. The level of contributions is determined by a qualified actuary.
The contribution paid for the year ended 31 December 2021 was £20,000 (2020: £20,000). It has been agreed with the trustee that contributions for the next year will be £5,000 (2020: £20,000).
Given that the defined benefit pension scheme is in surplus at 31 December 2021, there is expected to be no material impact on the Group's future cash flows.
|
|
(ii) Reconciliation of defined benefit obligation and fair value of scheme assets
|
|
||||||||||||||||
|
|
All defined benefit schemes are exposed to materially the same risks and therefore the reconciliation below is presented in aggregate.
|
|
||||||||||||||||
|
|
|
Defined benefit obligation |
Fair value of scheme assets |
Effect of asset ceiling |
Net defined scheme liability |
|
||||||||||||
|
|
|
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|
||||||||
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Balance at 1 January |
1,804,000 |
1,733,000 |
(1,846,000) |
(1,902,000) |
42,000 |
169,000 |
- |
- |
|||||||||
|
|
Interest cost |
23,000 |
34,000 |
(23,000) |
(34,000) |
- |
- |
- |
- |
|||||||||
|
|
Included in profit or loss |
1,827,000 |
1,767,000 |
(1,869,000) |
(1,936,000) |
42,000 |
169,000 |
- |
- |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Remeasurement loss Actuarial loss from: |
|
|
|
|
|
|
|
|
|||||||||
|
|
Demographic assumptions |
(4,000) |
124,000 |
- |
- |
- |
- |
(4,000) |
124,000 |
|||||||||
|
|
Limited by asset ceiling |
- |
- |
- |
- |
155,000 |
(127,000) |
155,000 |
(127,000) |
|||||||||
|
|
Return on plan assets (excl. interest) |
- |
- |
(131,000) |
23,000 |
- |
- |
(131,000) |
23,000 |
|||||||||
|
|
Change in asset ceiling (excl. interest)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||
|
|
Included in other comprehensive income |
(4,000) |
124,000 |
(131,000) |
23,000 |
155,000 |
(127,000) |
20,000 |
20,000 |
|||||||||
|
|
Employer contributions |
- |
- |
(20,000) |
(20,000) |
- |
- |
(20,000) |
(20,000) |
|||||||||
|
|
Benefits paid |
(92,000) |
(87,000) |
92,000 |
87,000 |
- |
- |
- |
- |
|||||||||
|
|
Other movements
|
(92,000) |
(87,000) |
72,000 |
67,000 |
- |
- |
(20,000) |
(20,000) |
|||||||||
|
|
Balance at 31 December |
1,731,000 |
1,804,000 |
(1,928,000) |
(1,846,000) |
197,000 |
42,000 |
- |
- |
|||||||||
|
Actuarial assumption
|
|||
|
The principal actuarial assumptions used in the determining calculating the present value of the defined benefit obligation (weighted average) include:
|
|||
|
|
|
2021 |
2020 |
|
Discount rate |
1.90% |
1.30% |
|
|
Future salary increases |
2.40% |
2.00% |
|
|
Inflation assumption (RPI) |
3.20% |
2.80% |
|
|
Mortality rates ‑ for male aged 65 now |
1.00% |
1.50% |
|
|
Mortality rates ‑ for female aged 65 now |
1.00% |
1.00% |
|
|
Longevity at retirement age (current pensioners) |
|
|
|
|
Males |
86.1 years |
86.6 years |
|
|
Females |
88.5 years |
88.1 years |
|
|
Longevity at retirement age (future pensioners) |
|
|
|
|
Males |
87.1 years |
88.4 years |
|
|
Females |
89.6 years |
89.4 years |
|
|
|
|
|
|
32. Share‑based payments
|
Equity settled share option plan
The Company has a Savings‑Related Share Option Plan ("SAYE") for all employees of the Group. In accordance with the terms of the plan, as approved by shareholders, employees of the Group may be granted options to purchase ordinary shares. There are no performance criteria for the SAYE and options are issued to participants in accordance with HMRC rules. Vesting is conditional on continuity of service.
As at 31 December 2020, 5,057,729 share options remained active; these were issued during 2019 at a weighted average option price of £0.13 per share. During the current year 4,077,374 new options were issued and 1,857,255 options lapsed on employees leaving the Group. During the current year 32,200 options were exercised with an option price of £0.10 per share. The remaining contractual life of the remaining 7,245,648 options is approximately 3 years.
In addition, as at 31 December 2020, 9,065,000 share options remained active which were issued under Enterprise Management Incentives (EMIs). On 6 March 2021, 2,525,000 of these options were transferred into a new scheme at a weighted average option price of £0.18 per share. During the current year 2,885,000 new options were issued and 250,000 options lapsed on employees leaving the Group. The remaining contractual life of the remaining 11,700,000 options is approximately 3 years.
Share options are valued using the Black‑Scholes model. The inputs to the model are the option price and share price at date of grant, expected volatility (20%), expected dividend rate (0%) and risk free rate of return (4%). The model has been adjusted for expected behavioural considerations.
The cost of options is amortised to the Statement of Comprehensive Income over the service life of the option resulting in a charge of £149,210 for the year (2020: £68,992).
|
33. Related party transactions
|
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.
A rent charge of £28,000 was paid in the year for leased office premises from a subsidiary of REI plc, a Company controlled by the Group's Non‑Executive Chairman.
|
34. Changes in liabilities arising from financing activities
|
|||||
|
|
Cash / bank overdraft |
Borrowing due within one year |
Borrowing due after one year |
Total |
|
|
|
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
Net debt at 31 December 2019
|
618,375
|
(1,261,306)
|
(2,634,742)
|
(3,277,673)
|
|
|
Cash flows |
2,202,520 |
- |
- |
2,202,520 |
|
|
Repayment of bank loans |
- |
38,467 |
- |
24,321 |
|
|
Unpaid interest |
- |
- |
(14,146) |
- |
|
|
New Likewise Floors invoice discounting facility |
- |
(946,312) |
- |
(740,562) |
|
|
Reduction in William Armes Limited invoice discounting |
-
|
205,750
|
-
|
-
|
|
|
New lease liabilities |
- |
(1,125,006) |
(4,100,767) |
(5,225,773) |
|
|
Repayment of lease liabilities
|
-
|
863,841
|
-
|
863,841
|
|
|
Net debt at 31 December 2020 |
2,820,895 |
(2,224,566) |
(6,749,655) |
(6,153,326) |
|
|
|
|
|
|
|
|
|
Net debt at 31 December 2020
|
2,820,895
|
(2,224,566)
|
(6,749,655)
|
(6,153,326)
|
|
|
Cash flows |
5,626,655 |
- |
- |
5,626,655 |
|
|
Repayment of bank loans |
- |
(39,743) |
139,105 |
99,362 |
|
|
Increase in invoice discounting facility |
- |
(1,266,279) |
- |
(1,266,279) |
|
|
New lease liabilities |
- |
(1,535,929) |
(5,518,894) |
(7,044,408) |
|
|
Repayment of lease liabilities
|
-
|
886,625
|
-
|
876,210
|
|
|
Net debt at 31 December 2021 |
8,447,550 |
(4,179,892) |
(12,129,444) |
(7,861,786) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35. Post balance sheet events
|
|
||||
Share Transactions
On 11 January 2022, the Company allotted 40,000,000 new £0.01 Ordinary Shares for consideration of £0.35 per share, totalling £14,000,000 and allotted a further 5,000,000 new £0.01 Ordinary Shares at par as part of the consideration for the acquisition of the entire share capital of Valley Wholesale Carpets (2004) Limited.
On 28 January 2022, the Company allotted 5,714,286 new £0.01 Ordinary Shares for consideration of £0.35 per share, totalling £2,000,000.
On 22 February 2022, the Company reduced the share premium account by £22,000,000 and this balance was transferred to the distributable retained earnings of the Company.
On 23 March 2022, the Company allotted 204,000 new £0.01 Ordinary Shares for consideration of £0.10 per share, totalling £20,400 and allotted a further 2,500 new £0.01 Ordinary Shares for consideration of £0.21 per share, totalling £525. These shares were issued under the Company's SAYE scheme.
On 4 April 2022, the Company allotted 500,000 new £0.01 Ordinary Shares at par as part of the consideration for the acquisition of the entire share capital of Delta Carpets (Holdings) Limited by Likewise Floors Limited.
Acquisitions
On 14 January 2022, the Company acquired the entire issued share capital of Valley Wholesale Carpets (2004) Limited and its wholly owned subsidiary. Consideration of £29,615,650 for the purchase was in the form of £14,000,000 cash, £10,000,000 cash extracted from the acquired company, £1,000,000 deferred cash consideration and the issue of 5,000,000 new shares of £0.01 each in Likewise Group Plc valued at £1,750,000 at the date of acquisition and which includes a guaranteed cash payment of the difference between £1 per share and the share price at 14 January 2024. The fair value of this arrangement as at the grant date has been reflected in the purchase consideration outlined.
The final completion accounting, including the fair value accounting of assets and liabilities acquired, has not yet been finalised and therefore disclosure of the fair value net assets acquired is not yet possible. The acquisition is expected to contribute annual revenue of approximately £36.0m and profit before tax of £2.5m.
On 1 April 2022, Likewise Floors Limited, a subsidiary of the Company, acquired the entire issued share capital of Delta Carpets (Holdings) Limited and its wholly owned subsidiary. Consideration of £3,000,000 was paid in the form of £1,500,000 cash, £1,000,000 cash extracted from the acquired companies and 500,000 new £0.01 shares in Likewise Group Plc valued at £175,000 at the date of acquisition which includes a guaranteed cash payment of the difference between £1 per share and the share price at 1 April 2024.
The final completion accounting, including the fair value accounting of assets and liabilities acquired, has not yet been finalised and therefore disclosure of the fair value net assets acquired is not yet possible but is expected to be c. £0.1m. The acquisition is expected to contribute annual revenue of approximately £6.5m and profit before tax of £0.4m.
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