Final Results for the Year Ended 1 July 2021

RNS Number : 6942W

Barkby Group PLC

24 December 2021

 

24^th December 2021

Barkby Group PLC

("Barkby", the "Group" or the "Company")

Final Results for the Year Ended 1 July 2021

Barkby Group PLC, the diversified business group, announces its audited results for the period to 1 July 2021.

Charles Dickson, Executive Chairman of Barkby Group Plc, said:

"Whilst navigating the impact of COVID-19, we used the 2021 financial year to consolidate our operations. We adapted our strategy and focussed our teams to ensure that our businesses were set up for success when lockdown and trading restrictions allowed.

The pandemic impacted our businesses in different ways. We believe there are significant opportunities for growth and to generate shareholder value, particularly in our core businesses of Property Development and Pubs and, further restrictions on trading notwithstanding, we look forward to 2022 with confidence."

Operational Highlights

Real Estate

· The Group's Commercial Property Division provided positive cash flow to support areas impacted by COVID-19.

· Post-period end has seen significant activity including the purchase of sites at Maldon and Wellingborough, final planning consent at Huntingdon and Maldon, exchange of contracts to purchase a site in Swindon and the sale of land at Saffron Walden currently in legals.

· At Maldon, we have signed Agreements to Lease with Costa Coffee Ltd, Toolstation Ltd and Formula One Autocentres Ltd.

· At Wellingborough, we have signed Agreements to Lease with Greggs Plc and Formula One Autocentres Ltd.

· A further four Agreements to Lease are in legals across Wellingborough, Maldon and Huntingdon.

Barkby Pub Company

· Increased our estate to seven pubs during the year with new operating leases at the Harcourt Arms and the Ebrington Arms.

· Significant periods of the year were disrupted due to COVID-19 and enforced trading restrictions.

· Underlying demand for Barkby's premium pub experience and accommodation offer remains strong, with revenue exceeding pre-COVID levels when trading restrictions were removed.

Investments

· Cambridge Sleep Sciences has entered distribution agreements covering the UK, Europe, Australia, South Africa and the US.

· Improved efficiency and cost control initiatives have been implemented at Workshop and Centurian to protect these businesses from temporary or ongoing trading disruption from COVID-19.

· Verso Biosense has continued to make good progress, with a key clinical study milestone now under way.

Outlook

· Pipeline for the Commercial Property Division remains strong, with five active developments expected to commence construction in 2022.

· Barkby's property development pipeline is currently in excess of £40m Gross Development Value.

· Despite the recent threat of Omicron and ongoing potential for other COVID-19 variants, we remain confident that we can efficiently manage periods of trading disruption and continue to grow our pub business.

· The Group's life sciences investments in Cambridge Sleep Sciences and Verso Biosense are progressing well.

· The Group is in a strong position to return to profitability, driven by its well-progressed and profitable commercial property development pipeline and we look forward to the next 12 months with confidence.

Financial Highlights - Revised

	2021	2020	Change
Revenue (£m)	15.1	12.0	+3.1
Operating profit/-loss (£m) *	-3.4	-2.3	-1.1
Profit/-loss before tax (£m)	-4.4	-3.1	-1.3
Net increase/-decrease in cash (£m)	1.0	-1.2	+2.2
Basic earnings per share (pence)	-3.09	-2.69	-0.40
Net assets per share (pence)	0.60	3.71	-3.11

* Results were significantly affected by COVID-19.  In addition to this, the P&L included £1.0 million of start-up costs for Cambridge Sleep Sciences in 2021 (2020: £0.3 million).

Annual Report

In accordance with AIM Rule 20, the annual report will be available to view on the Company's website: https://www.barkbygroup.com/investors/ and is expected to be published on 10 January 2022 .

Enquiries: 

Barkby Group PLC
Charles Dickson, Executive Chairman Douglas Benzie, Chief Financial Officer
finnCap Ltd (Nomad and Broker)	[phone]
Carl Holmes/Simon Hicks (corporate finance) Tim Redfern/Richard Chambers (ECM)
Camarco (Financial PR)	[phone]
Jennifer Renwick/Jake Thomas

Notes to editors

Barkby Group PLC is a diversified group of high growth, high quality businesses run by an entrepreneurial and experienced management team. The existing wholly owned businesses units within Barkby include: Barkby Real Estate, Barkby Pub Co. and Barkby Investments (comprising of Workshop Coffee, Centurian Automotive, Cambridge Sleep Sciences and a minority stake in Verso Biosense).

Barkby's strategy is to accelerate and maximise opportunities within its existing businesses.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

Chairman's Statement

Whilst navigating the impact of COVID-19, we used the 2021 financial year to consolidate our operations. We adapted our strategy and focussed our teams to ensure that our businesses were set up for success when lockdown and trading restrictions allowed.

The pandemic impacted our businesses in different ways. We believe there are significant opportunities for growth and to generate shareholder value, particularly in our core businesses of Property Development and Pubs and, further restrictions on trading notwithstanding, we look forward to 2022 with confidence.

Outlook

Despite the ongoing and unpredictable impact of COVID-19 variants, we remain confident that underlying demand for our traditional pub experience, with delicious food, attentive service and relaxed accommodation remains strong. During the quarter to September 2021, our pub business enjoyed its first uninterrupted quarter of trade since the pandemic began. Our pub estate achieved record revenue and profit, with underlying like-for-like sales up 22% in comparison to the same period in 2019 before COVID-19. Our property development pipeline is well established, and several key developments are ready to build.

We have recently acquired additional land at Wellingborough and completed the acquisition of a site in Maldon. We have also exchanged contracts to acquire land for a 30,000 sq ft development in Swindon and will shortly complete the acquisition of a site in Huntingdon. The Group's investments in Workshop, Centurian, SleepHub and Verso Biosense have stabilised following the disruption from COVID-19 and we expect these businesses to generate profit and offer potentially lucrative exit opportunities over the next few years. 

Finally, I would once again like to recognise our most important attribute, our people, who have demonstrated solidarity and commitment across the group. Despite substantial changes within the business, and the impact of events outside our control, I have been hugely impressed and proud of the attitudes shown across all Barkby teams. I have full belief and confidence in our teams and their ability to deliver the Group's potential for success.

Business and Financial Review

Following the combination in January 2020 of the Tarncourt property business and Workshop Coffee into Barkby's existing pub and automotive businesses, as well as expansion into Life Sciences, Barkby had a brief period as an enlarged group before the COVID-19 pandemic impacted trading. Underlying trade was significantly impacted from that point until trading restrictions reduced in the summer of 2021

The Commercial Property Development pipeline progressed significantly, with a number of land acquisitions ready to commence construction with tenants secured.

As the economic outlook stabilised towards the end of the financial year, we experienced accelerated tenant demand and finalised three key developments at Wellingborough, Maldon and Huntingdon ready to commence construction. Barkby developed its financial and operational controls during the pandemic, balancing cost control and cash preservation with the delivery of planned initiatives to improve our businesses. Focusing on our business planning has supported our view that the combined group provides financial, strategic and operational benefits beyond the capacity of each individual company.

We utilised the Furlough scheme to support our workforce during periods of enforced closure and trading uncertainty, and provided additional top-up payments to support team members who may not have been eligible under the scheme. This strategy has helped retain an engaged team that is passionate and clearly focused on delivering sales growth, improved profitability and exceptional service to our customers.

Property Development

Barkby Real Estate sources and develops commercial property schemes predominantly based in the South East of England. Barkby specialises in mixed-use trade and retail parks including retail warehouses, logistics, storage, industrial, leisure and quick food service.

COVID-19 has resulted in delays to the commencement of some planned developments, with tenants taking longer than normal to agree commercial terms. However, there remains a strong interest in the Group's upcoming schemes from Tenants, as outlined below.

During the most significant periods of COVID-19 impact, land acquisition deals were less competitive due to uncertain buyer demand. However, commercial development activity has increased significantly since lockdown restrictions reduced.

The Government has published proposals for reform of the land use planning system. The most significant changes aim to improve the slow and complex system of local development plans. We believe that future legislation has the potential to reduce development timeframe and associated costs.

COVID-19 accelerated some of the existing underlying real estate trends, such as increased online delivery and working from home. Demand for logistics space has also been significant. Whilst this has generated changes in tenant demand in some sectors, others have remained relatively insulated or seen growth.

Due to our flexible tenant-led approach, Barkby can focus its activity to match tenant demand. We have

seen a shift away from traditional retail parks, however demand from trade and quick service food tenants has been robust.

Each development project takes approximately 18-24 months to complete, therefore many tenants adopt long-term views in their expansion strategies.

Barkby follows a capex light business model to de-risk the development process and ensure clear financial visibility over the lifecycle of each scheme. Barkby does not purchase land speculatively but secures land under purchase agreements that are subject to obtaining the required planning consents for the scheme.

Our tenant-led approach built on established relationships with a broad range of national occupiers and other key tenants. This gives clear visibility of potential tenant's geographical growth strategies and allows Barkby to confirm tenant interest in a proposed scheme at an early stage.

A pre-let threshold of 70 per cent is targeted before commencing construction. Typical tenants of Barkby

schemes include Aldi Stores Limited, Greggs Plc, Costa Limited, MKM Building Supplies Limited, Travis Perkins plc, Halfords Group Plc and others.

In line with its tenant-led approach, Barkby adopts a pro-active approach to land acquisitions. This approach can require a land-assembly of multiple parcels of land and often includes off-market purchases.

Once a contracted development site has been obtained, planning applications are submitted and prospective tenants execute 'agreement to lease' documentation. After planning has been granted and the future tenants are legally committed to the scheme developments are often forward funded

with institutional buyers, who fund costs incurred to date and commit to fully fund construction through

to completion via monthly payments. The scheme is then built on a fixed price contract. In some instances, development finance is used before selling the completed scheme.

The completed scheme is then delivered to the tenant to fit out at practical completion, at which point the institutional buyer completes the purchase and pays the completion profit due.

Barkby Real Estate specialises in projects with a gross development value of between £3.0 million and £20.0 million and targets a minimum EBITDA margin of 20 per cent on each project. Our current pipeline includes five active developments with gross development value of £30m within a pipeline in excess of £40m.

Revenue and costs are recognised across the life of each scheme and can often span multiple financial

periods. Construction work at our Hastings development, which is anchored by Aldi Stores, Greggs and Costa Coffee, completed in June 2020 and practical completion was granted in August 2020. Hastings Borough Council completed their purchase of the site, resulting in a net balancing payment receipt of £1.8m in the financial year.

Barkby Pub Co.

Renowned for their welcoming atmosphere, our multi-award winning pubs are located in the Cotswolds, Oxfordshire and West Sussex. We aim to deliver first class food, drink and accommodation, as well as a fabulous customer experience.

The hospitality market was significantly impacted by COVID-19 during the financial year. Industry representative bodies have repeatedly highlighted the financial difficulties faced by all operators and the risk that many venues may not survive.

Barkby operates premium pubs with rooms located predominantly in the Cotswolds and West Sussex, and therefore has fared relatively better than wet-led pubs, and those dependent on office-workers and businesses that promote congested use of space such as music venues, late-night bars and nightclubs.

Our segment of the market recovered quickly when lockdown restrictions were lifted. This is due to our large footprint properties that are able to operate in a COVID-secure way with minimal interruption. We also experienced increased demand for domestic holidays from UK residents as a result of reduced confidence and appetite for international holiday travel alongside enforced travel restrictions.

Barkby Pubs' proposition is led by excellence in food and service, showcasing the best of English produce, alongside a passion for creating memories and delivering incredible hospitality. Barkby Pubs seeks to create premium individual pubs with accommodation to address the trend away from branded pubs and large hotels. Barkby offers market-leading pub food and exemplary service, providing classic and sophisticated modern British cuisine with seasonal and artisan ingredients alongside local produce.

Barkby Pubs operated seven premises during the year, with a total of 60 rooms. Each pub has its own website to take bookings, display menus, advertise upcoming events and promote their unique atmosphere. Marketing is managed centrally with regular newsletters and local media as well as increased social media presence and digital storytelling to create an authentic connection with our customers.

Our focus is to maintain the individual character and uniqueness of each location, whilst implementing operational best practice. In the next 12 months, we will invest in an improved labour planning model as well as stock control systems and processes. These activities are expected to increase the underlying profitability across the estate.

Barkby has invested in developing its people, systems and processes so that it is ready to expand rapidly and acquire further sites. We have developed a site acquisition methodology to ensure new pubs fit our operational model and required financial returns. We will target a combination of leasehold and freehold acquisitions.

During the year, Barkby added The Harcourt Arms to its portfolio on a leasehold basis. The Harcourt Arms is a 17th century village pub that holds 2 AA Rosettes and 5 AA Gold Stars. The property has been fully refurbished to the highest standards and provides nine high-quality letting rooms and one master suite.

We also added the Ebrington Arms, another 17^th century village pub with rooms that is renowned for the quality of its food and service. We continue to look for premium pubs with rooms in our target geographies and are in negotiations on several potential sites. It is our intention to grow the portfolio to 12 pubs by the end of the 2023 financial year.

Due to the impact on trading of COVID-19 during the year it is difficult to report on the underlying performance of the business during this period.

We have worked hard to maintain good communication and work in a collaborative way with our employees, suppliers and landlords during this difficult time.

The pub business made an operating loss of £0.1m excluding depreciation, amortisation and interest

expense, during the financial year.

Investments - Workshop Coffee

Workshop Coffee is a speciality coffee roaster that operates through multiple sales channels including wholesale, direct to consumer via an online webshop and subscription service, and four coffee shops located in central London.

As with Barkby's pub business, Workshop Coffee was also significantly impacted by the COVID-19 pandemic.  Independent coffee shops, hotels and other hospitality customers have been forced to close during the national lockdown periods, impacting Workshop's wholesale revenues.

As working-from-home became a requirement, home delivery sales increased significantly.  This created a strong market opportunity for Workshop with its existing Webshop, subscription customers and strong digital presence.

With significant reductions in London footfall, Workshop remains cautious about reopening its retail stores. Three units were re-opened in the summer of 2021, with a focus on cost control. As the number of workers, shoppers and tourists have returned to central London, revenues have steadily increased

and the coffee shops are expected to generate positive operating profits going forward, subject to any significant ongoing impact from the Omicron variant.

Workshop made sales of £1.2m in the year and generated an Operating loss of £0.6m. Gross margin increased to 45% due to a change in the sales mix between retail, online and wholesale.

Investments - Centurian Automotive

Centurian Automotive is a Luxury and Supercar automotive dealership with a fast growing and differentiated online digital presence.

Centurian distinguishes itself within the Automotive industry with its innovative customer journey and bespoke product.

Centurian's client base has been established over 14 years and boasts a substantial, loyal customer list as well as engaging with new and aspirational future clients through its social media platforms.

Trading trends have been impacted by COVID-19 due to changes in consumer behaviour alongside enforced trading restrictions.  However, out of the crisis has come an advancement in innovation, with new online used car advertising platforms emerging to compete with established websites and the launch of home-delivery services.

Centurian sales and cash flow remained robust despite the trading restrictions. The business generated sales of £11m in the year. An average margin of 10% was made on car sales. Centurian generated a net loss for the year of £66k.

Investments - Cambridge Sleep Sciences

Barkby acquired the intellectual property rights to develop a device that delivers scientifically formulated sounds to improve and facilitate natural sleep. The "SleepHub" product was subsequently

launched in November 2020.

The importance and benefits of sleeping patterns continue to be an area of focus in health and

wellness. The market is relevant to both those with sleeping dis-orders as well as people wanting

improvements in every-day sleep.

Since launch, SleepHub has received positive reviews in major publications including The Telegraph, The Daily Mail and Metro. SleepHub has also featured in magazines such as Ideal Home alongside a number of health and wellbeing titles.

We have focused our sales strategy on the distributor channel and have agreements with Go10 (UK), Wenatex (Australia), M-Photo (South Africa), Lifeworks (North America/Europe).  We are now selling in Harrods, Selfridges as well as online channels such as Amazon.

There are significant opportunities in the Healthcare space and CSS has started clinical studies to validate the benefits of our technology. Further studies looking at disease areas where insomnia is a significant symptom are in the planning phase. We have seen positive early sleep improvement signals in patients with Parkinsons Disease.

Additional SleepHub models will be added to the range.  The Anywhere device, which addresses key areas of market feedback, are on track to be available from May 2022.

Cambridge Sleep Sciences incurred development, marketing and administrative costs totaling £1.031 million during the period.

Investments - Verso Biosense Ltd

Verso has continued to make good progress. Engineering breakthroughs have led to major improvements in chip sets, monitoring functions, electronics and garment design. The team has moved into a clinical study in 2021 and are in the process of signing up commercial and clinical partners.

The discovery of novel, new data in the uterine environment for the very first time has huge potential to unlock meaningful patient data, changing diagnostic paradigms and optimising treatments across IVF/fertility, endometriosis, fibrosis, menopause and oncology. The broadening of disease areas that Verso's wireless powered battery-free uterine monitoring platform can address has shown the commercial opportunity to be very significant.

Barkby made an investment of £0.5m in August 2020 in the form of a Convertible Loan Agreement bringing the total investment to £2.5m.

COVID-19 Pandemic, Liquidity and Going Concern

Barkby Group is a diversified group of high growth businesses run by an entrepreneurial and experienced management team. The group structure aims to combine stable, cash generative businesses with growth potential alongside high growth opportunities with exceptional market potential and the ability to disrupt.

Throughout the financial year and since the reporting date, Barkby's hospitality and consumer division was impacted by the COVID-19 pandemic due to its impacts on consumer behaviour as well as enforced trading restrictions. Barkby has weathered the COVID-19 pandemic largely due to the support of its cash generative commercial property development business.

The Board has managed cash tightly through all three national lockdowns and has increased cash headroom by refinancing the £3.5 million Tarncourt facility into a new £5 million facility with an expiry date of 30 June 2023.

The Group has financed the acquisition of development sites via secured borrowings. The Group currently has net cash available of c. £1.5 million as at December 2021. In addition, the Board have taken the steps of consulting with their major shareholders regarding a potential equity raise and our major shareholders have confirmed their continued support should this become necessary.

Despite good progress in our property development pipeline, with several sites ready to commence construction, and strong trade in our pub business since lockdown restrictions reduced, we are still in a period of significant economic uncertainty as the potential impact of COVID-19 variants remains present.

The Board has therefore prepared a profitability and cash flow forecast to June 2023 for each business incorporating assumptions that reflect a severe but plausible downturn scenario.

A key feature of Barkby's businesses is that they have a low fixed cost base. The property development business has predominantly flexible costs. Centurian operates from a unique showroom setting that carries a lower cost than typical car dealerships. The hospitality businesses have engaged closely with landlords and brewers and agreed rent reductions to compensate for restricted trade. The Group's workforce is predominantly comprised of employees on flexible contracts.

During the COVID-19 pandemic, Barkby's diversification has been a significant strength enabling financial and operational support across the group. Barkby benefited from its diversity, with longer-term property development projects providing positive cash flow to support the most impacted businesses. As we come out of lockdown, management considers that the pubs and coffee business are well positioned for a return to profitability and that the Group is in a strong position to benefit from the lifting of government lockdown restrictions. Based on its profitability and cash flow forecasts for each business incorporating assumptions that reflect a severe but plausible downturn scenario the directors consider going concern basis of preparation to be an appropriate basis for the preparation of these financial statements.

Group statement of profit or loss and other comprehensive income
For the period ended 1 July 2021
	Period ended 1 July 2021		Period ended 2 July 2020
	£'000s		£'000s
Revenue	15,142		12,048
Cost of sales	-13,145		-11,188
Gross profit	1,997		860
Other operating income	350		367
Administrative expenses	-5,787		-3,538
Loss from operations	-3,440		-2,311
Finance expense	-978		-949
Finance income	40		125
Loss before tax	-4,378		-3,135
Income tax expense	-		-4
Loss and total comprehensive income for the period	-4,378		-3,139
Profit/(loss) for the year is attributable to:
Non-controlling interest	-164		-44
Owners of Barkby Group Plc	-4,214		-3,095
	-4,378		-3,139
	Pence		Pence
Loss per share for profit attributable to the owners of Barkby Group Plc
Basic and diluted earnings per share	-3.09		-2.69
All of the loss of the year is from continuing operations

Group consolidated statement of financial position
As at 1 July 2021
	1 July 2021		2 July 2020
	£'000s		£'000s
Assets
Non-current assets
Property, plant and equipment	1,480		1,554
Intangible assets	8,503		8,355
Right-of-use assets	2,977		2,643
Investments	2,542		2,042
Other non-current assets	219		127
Total non-current assets	15,721		14,721
Current assets
Inventory	6,096		4,226
Trade and other receivables	220		466
Contract assets	-		4,898
Prepayments	380		401
Other current assets	84		641
Cash and cash equivalents	84		306
Total current assets	6,864		10,938
Total assets	22,585		25,659
Liabilities
Current liabilities
Trade payables	-1,826		-1,937
Borrowings	-7,395		-8,999
Lease liabilities	-531		-491
Income tax	-25		-107
Other current liabilities	-4,347		-1,833
Total current liabilities	-14,124		-13,367
Non-current liabilities
Borrowings	-4,652		-4,899
Lease liabilities	-2,938		-2,349
Provisions	-48		-28
Total non-current liabilities	-7,638		-7,276
Total liabilities	-21,762		-20,643
Net assets	823		5,016
Equity
Share capital	1,179		1,164
Share premium	4,493		4,323
Capital redemption reserve	-		-
Merger reserve	-422		-422
Issued equity	5,250		5,065
Retained losses	-4,219		-5
Equity attributable to the owners of Barkby Group Plc	1,031		5,060
Non-controlling interest	-208		-44
Total equity	823		5,016

Group statement of cash flows
For the period ended 1 July 2021
	Period ended 1 July 2021		Period ended 2 July 2020
	£'000s		£'000s
Cash flows from operating activities
Loss before tax	-4,378		-3,135
Adjustments to reconcile loss before tax to net cash flows
Depreciation of property, plant and equipment and right-of-use assets	774		576
Amortisation of intangible assets	137		5
Finance income	-40		-125
Finance expense	978		949
Working capital changes
Decrease/(increase) in trade receivables, contract assets and prepayments	5,630		-4,431
Increase in inventories	-1,870		-144
Increase/(decrease) in trade and other payables	2,517		-916
	6,277		-5,491
Interest paid	-720		-775
Interest received	24		1
Income tax paid	-82		-
	-778		-774
Net cash flow from operating activities	2,970		-7,995
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired	-55		-549
Purchase of investments	-500		-1,950
Purchase of property, plant and equipment	-264		-194
Purchase of intangible assets	-285		-287
Net cash used in investing activities	-1,104		-2,980
Cash flows from financing activities
Proceeds from issue of shares	125		5,075
Proceeds from borrowings	14,472		8,985
Share issue transaction costs	-		-531
Payment to shareholders	-		-375
Repayment of borrowings	-15,200		-2,981
Repayment of lease liabilities	-310		-393
Net cash raised in financing activities	-913		9,780
Net increase/(decrease) in cash and cash equivalents	953		-1,195
Cash and cash equivalents at the beginning of the financial year	-1,174		21
Cash and cash equivalents at the end of the financial year	-221		-1,174

Statement of changes in equity
For the period ended 1 July 2021
	Share	Share	Merger	Profit and loss	Non-controlling		Total equity
	capital	premium	Reserve	reserve	interest
Group	£'000s	£'000s	£'000s	£'000s	£'000s		£'000s
Balance at 3 July 2020	1164	4,323	-422	-5	-44		5,016
Loss after income tax and total comprehensive loss for the period	-	-	-	-4,214	-164		-4,378
Shares issued to settle deferred consideration	2	58	-	-	-		60
Transactions with owners in their capacity as owners:
Shares issued following the exercise of Warrants	13	112	-	-	-		125
	13	112	-	-	-		125
Balance at 1 July 2021	1,179	4,493	-422	-4,219	-208		823

Notes to the financial statements

Note 1. Company information

The consolidated financial statements of Barkby Group Plc for the year ended 1 July 2021 were authorised for issue in accordance with a resolution of the directors on 23 December 2021. Barkby Group Plc is a public limited company incorporated and domiciled in the UK. The company's number is 07139678 and the registered office is located at 115b Innovation Drive, Milton, Abingdon, Oxfordshire OX14 4RZ.

The Group's principal activities consist of real estate development, consumer and hospitality businesses and life sciences.

During the year the Company change its name from The Barkby Group Plc to Barkby Group PLC.

Note 2. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board ('IASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been

early adopted.

Basis of preparation

These consolidated financial statements of Barkby Group Plc (or "the Group") have been prepared in

accordance with International Accounting Standards in conformity with the requirements of the Companies act 2006.

In accordance with IFRS 3, the prior period financial statements were prepared as a reverse acquisition of Barkby Group Plc by the Dickson Controlled Entities. Therefore, although the prior period consolidated financial statements were issued in the name of Barkby Group Plc, the legal acquirer, the Group's activity was in substance, the continuation of the financial information of the Dickson Controlled Entities. The comparative consolidated financial statements therefore comprise the results of the Dickson Controlled Entities for the full period, and the results of Barkby Group Plc from 7 January 2020, the date of the reverse acquisition.

Accounting periods

The financial statements have been prepared covering the financial year ended 1 July 2021, in accordance with the Group's policy of drawing up financial statements to the nearest Thursday to the Group's accounting reference date of 30 June. As a result the financial year consists of a 52 week period.

The accounting reference date changed in the comparative financial period ended 2 July 2020. The Dickson Controlled Entities' previous accounting reference date was 31 March, and Barkby Group Plc's and Centurian Automotive Limited's were 31 May.

Therefore, the Group's consolidated financial statements cover the financial year from 3 July 2020 to 1 July 2021, with comparative financial information covering the financial period 1 April 2019 to 2 July 2020. The comparative information for the Company's financial statements cover the financial period from 1 June 2019 to 2 July 2020.

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, deferred contingent consideration and derivative financial instruments that have been measured at fair value.

The consolidated financial statements are presented in Pounds Sterling, which is Barkby Group Plc's functional and presentation currency and all values are rounded to the nearest thousand (£'000s) unless otherwise stated.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Barkby Group Plc ('company' or 'parent entity') as at 1 July 2021 and the results of all subsidiaries for the period then ended. Barkby Group Plc and its subsidiaries together are referred to in the financial statements as the 'Group'.

Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

During the comparative financial period (ended 2 July 2020), Barkby Group Plc acquired the share capital of Tarncourt Ambit Limited, Tarncourt Ambit Properties Limited and Workshop Trading Holdings Limited, which together with its subsidiary undertaking Workshop Trading (London) Limited, are called the Dickson Controlled Entities. After the transaction the shareholders of the Dickson Controlled Entities owned 86% of the share capital of the new combined entity. As a result this transaction is considered to be a reverse takeover.

These financial statements therefore consist of the consolidated financial statements of the Dickson Controlled Entities, which were considered to acquire Barkby Group Plc and its subsidiary, Centurian Automotive Limited with effect from 7 January 2020.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses incurred by the Group are only attributed to the non-controlling interest to the extent to which they can be recovered from those parties.

Note 3. Post Balance Sheet Events

Huntingdon Planning Permission

Planning permission was granted for a 32,000 sq.ft. scheme at Huntingdon in August 2021.

Maldon acquisition and finance

Barkby completed the freehold purchase of the former Quest Motor dealership in Maldon, Essex for a consideration of £2.2m in October 2021. The group entered a £4.4m debt facility to fund the acquisition of Maldon and refinance debt secured on the Saffron Waldon site.

Exchange of Contracts at Swindon

Exchanged contracts in December 2021 for a commercial development site in Swindon, Wiltshire. It is proposed that the Group will develop a 30,000 sq. ft. mixed-use retail and trade scheme at the site. Under the proposed development, the site has an estimated gross development value of £7.5 million.

 

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